Chapter© 2017 Cengage Learning®. May not be scanned, copie.docx

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© 2017 Cengage Learning®. May not be scanned, copied or
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16
Teams and Knowledge Management in Multinational
Corporations
Learning Objectives (1 of 2) Understand the difference between
groups and teams. Know the basic types of teams used by
multinationals. approaches, and contingency theory.Appreciate
the challenges faced by global teams.Understand the unique
challenges presented by virtual teams.

Learning Objectives (2 of 2) Learn about the stages of team
development and what steps multinationals can implement at
these stages to address global team challenges. Know the unique
suggestions to address virtual team challenges.Understand the
need for knowledge management systems within organizations.
The Nature of Global Teams (1 of 3) Multinational
corporations’ reliance on teams is increasing.Required for
facing inherent challenges of operating in a dynamic and rapidly
changing environment.Team-based approach enables
multinationals to meet both local and global customer needs
integrates design and development expertise from around the
world
The Nature of Global Teams
(2 of 3)Group: two or more individuals interacting to influence

and be influenced by each otherFormal group: created by a
company to achieve some specific work objectivesInformal
group: emerge as a result of organizational members' interests
Teams: a small number of people with complementary skills
committed to common performance goals and approach
The Nature of Global Teams
(3 of 3)Global team: geographically dispersed; differ in
nationality and culture Global co-located team: occasionally
meet in person; common organizational goals Global virtual
team: work together by using information and communication
technologiesintranets, Web meetings, WIKIs, e-mail, instant
messaging
Global Team Challenges (1 of 2)Individuals are from different
locations and different nationalities, making collaboration more
difficult. Cultural differences can lead to
miscommunication.Differences in problem solving.France –
favors understanding why problem occurred; longer time to

resolution. USA and Britain – tends to quick identification and
solution to problem.
Global Team Challenges (2 of 2)Language differences can
affect level of trust between team members.Power differentials
Natural tendency for team members to categorize themselves
based on similar versus dissimilar characteristics and
behaviors.Global virtual teams lack face-to-face interaction,
which can slow down communication.
Exhibit 16.2:
Spatial and Temporal Group Possibilities

Building the Global Team (1 of 2)Understanding stages of team
development can help multinationals address problematic issues
associated with teams and prepare for potential issues
encountered at each stage. Forming stage: Team members
becoming familiar with each other and assess the tasks that need
to get done.Storming stage: Emergence of intra-group conflicts
occurs as team members try to get a better understanding of
what needs to get done
Building the Global Team (2 of 2)Norming stage: Team
members are familiar with appropriate team behaviors and focus
on achieving team goals. Performing stage: Team is highly
functional and team members operate without conflict.
Adjourning stage: Team members disband as team goals are
achieved.
Steps to Address Team Development Stages Specific Challenges
(1 of 6)At forming and storming stages, care should be taken to

ensure that the right team members, with the ability to adapt to
and manage the differences inherent in global teams, are
chosen. Where possible, Human Resources Management should
be involved in team member selection.
(2 of 6)Human Resources looks for three sources of capital to
ensure teams function successfully:Human capital: The various
skills and abilities that can be used by team members to develop
better collaboration.Cultural intelligence:Cognitive: Self-
awareness; use of cultural knowledge when faced with cross-
cultural situations.Motivational: The desire to continuously
learn and adapt to new aspects of cultures and their differences
Behavioral: The ability to exhibit the appropriate forms of
verbal and non-verbal behaviors in new cultural settings
(3 of 6)Human Resources looks for three sources of capital to
ensure teams function successfully (cont’d):Social Capital: The
ability to function effectively as team members. Associability:

The ability to emphasize collective goals and to minimize
individual goals.Trust: The ability to have confidence in other
team members. Political Capital: Refers to the leadership
ability of team members to remove team barriers and to ensure
that team members have a shared perspective.
(4 of 6)
Prized attributes of team leaders:High levels of cultural
intelligence Transformational leadership abilities Servant
leadership abilities Being open to suggestions, especially those
from underrepresented managers with local know-howListening
skills
(5 of 6)Training is critical to the success of global teams
Cultural competency Language skillsCommunication with
nonnative speakers Sensitivity to different communication

styles; important issuesActive listening
(6 of 6)Three critical aspects of team success relate to
communications Energy: Both the degree to which team
members interact with each other through frequency of
exchange of messages as well as the nature of the messages
Engagement: The degree to which team members are
communicating with each other and engaged in the team
Exploration: The degree to which team members interact
externally with other teams
Benefits of Using Global TeamsInherent diversity in
multinational global teams—in nationality, gender, and
experience—is seen as a benefit to team performance.Global
teams benefit companies both internally and externally in terms
of innovation and new product development.Critical to
organizational learning, an important factor in the competitive
advantage necessary to the success of multinational
corporations.

Knowledge Management (1 of 2)Knowledge Management:
Systems, mechanisms, and other design elements of an
organization that ensure the right form of knowledge is
available to the right individual at the right time.The nature of
knowledge:Explicit knowledge: Knowledge that is codified and
transferable by a common process or language; easily dispersed.
Tacit knowledge: Knowledge that cannot be easily codified or
written down; learned by doing; home/hub-based.
Knowledge Management (2 of 2)The challenge for
multinationals now is to alter the use of knowledge so that
innovation based on either kind—tacit or explicit—can flow
from both dispersed or co-located sources. Recommendations
for multinationals to maximize use of knowledge:Optimize
innovation footprint to tap optional knowledge sources
worldwide. Improve communication and knowledge sharing in a
dispersed network of locations.Collaborate with both external
and internal knowledge sources.

Exhibit 16.4:
Moving Beyond the Knowledge Dispersion/Complexity Trade-
Off: Knowledge Management for the Multinational Company
Exhibit 16.5: Knowledge Management Barriers
SOURCE: Based on Riege, Andreas. 2005. “Three-dozen
knowledge-sharing barriers managers must consider.” Journal of
Knowledge Management, 9(3), pp. 18–35 ; Voelpel, Sven C.,
and Zheng Han. 2005. “Managing knowledge sharing in China:
The case of Siemens ShareNet.” Journal of Knowledge
Management, 9(3), pp. 51–63.

Knowledge Management Barriers (1 of 3)Multinationals must
assess the extent of barriers and initiate actions to reduce their
impact. Strategies and a reward mechanism should be put in
place to motivate and encourage employees. Robust use of
computer and web-based technologies Data repositories of
explicit knowledge Use tacit knowledge through networking,
collaborative commerce, and decision support system tools
Knowledge Management Barriers (2 of 3)Strategies for
developing a knowledge management system that accesses and
manages the tacit and complex knowledge in its dispersed
locations: Start small to develop a collaborative culture.Provide
a stable organizational context.Senior manager oversight;
rigorous project management.Appoint a lead site.Invest time
defining the innovation.Allocate resources on the basis of
capability, not availability.
Knowledge Management Barriers (3 of 3)Strategies for
developing a knowledge management system that accesses and

manages the tacit and complex knowledge in its dispersed
locations (cont’d): Build enough knowledge overlap for
collaboration.Limit the number of subcontractors and
partners.Do not rely solely on technology for communication.
Summary and Conclusions
(1 of 2)Multinational corporations are increasingly relying on
teams to integrate the expertise of individuals located in
geographically dispersed subsidiaries.Team work is growing in
importance in the goal of developing and releasing new
products.This chapter examines the nature of groups, the
difference between groups and teams and their various types,
and draw a distinction between traditional co-located global
teams and virtual global teams.
Summary and Conclusions
(2 of 2)The demands of managing global teams featuring
members who represent a diversity of nationalities, geography,

culture, and languages are well documented.This chapter also
examines the virtual global team, which brings its own unique
challenges to the organization.Research suggests that a number
of actions, framed within the various stages teams go through as
they develop, can ensure that they function effectively.
Chapter
15
Leadership and Management Behavior in Multinational
Companies
Learning Objectives (1 of 3) Know the characteristics of global
business leadership.Describe traditional North American models
of leadership, including trait theory, behavioral approaches, and
contingency theory.Explain the Japanese performance-
maintenance model.Apply the cultural-contingency model of
leadership

Learning Objectives (2 of 3) Develop sensitivity to national
cultural differences in preferred leadership traits and effective
leadership behaviors. Discuss how national culture affects the
choice of leader influence tactics. Discuss how national culture
influences subordinates’ expectations regarding appropriate
behaviors and the traits of leaders.
Learning Objectives (3 of 3) Explain the role of
transformational leadership in multinational settings.
Understand how national culture affects a leader’s attributions
regarding subordinates’ behaviors.Diagnose cultural situations
and suggest appropriate leadership styles to fit them.

LeadershipThe GLOBE’s universal definition of
Leadership:“the ability of an individual to influence, motivate,
and enable others to contribute toward the effectiveness and
success of the organizations of which they are
members.”Effective multinational leadership is more
challenging than being a good domestic leader. Widely different
leadership styles may be equally effective in reaching goals in
various cultures.
Global Leadership:
The New Breed (1 of 2)The Global Leader must have the skills
and abilities to interact with and manage people from diverse
cultural backgrounds in their multinational
organization.Characteristics of a global
leader:CosmopolitanSkilled at intercultural
communicationCulturally sensitiveCapable of rapid
acculturation

Global Leadership: The New Breed (1 of 2)Characteristics of a
global leader: (cont’d)A facilitator of subordinates’
intercultural performanceA user of cultural synergyA promoter
and user of the growing world cultureEmotionally intelligent
Three Classic Models:
A Vocabulary of LeadershipThe three basic models of
leadership entail:Leadership traitsLeadership
behaviorContingency leadership
Leadership Traits (1 of 2)Are leaders born or made?The Great-
Person Theory is the idea that leaders are born with unique
characteristics that make them quite different from ordinary
people.Contemporary views of leadership traits do not assume
that leaders are born.Although leaders are different, aspiring
leaders can achieve this difference by training and experience.

Leadership Traits (2 of 2)In the U.S., successful leaders
exhibit:High intelligence & self-confidenceGreat
initiativeAssertiveness & persistenceA great desire for
responsibility and the opportunity to influence othersA high
awareness of the needs of others
U.S. Perspectives on Leadership Behaviors (1 of 2)Although
leaders have different traits than subordinates, traits alone do
not make a leader. The behaviors leaders use to manage
employees may be more important. Classic U.S. studies of
leadership reveal two types:A task-centered leader gives
specific directions to subordinates so that they can complete
tasks.A person-centered leader focuses on meeting the social
and emotional needs of employees.

U.S. Perspectives on Leadership Behaviors (2 of 2)The
distinction between task-centered and person-centered also
applies to how leaders make decisions:Leaders who adopt an
autocratic leadership style make all major decisions
themselves.Those who employ a democratic leadership style
delegate the decision-making to subordinates. The consultative
and participative leadership styles falls midway between the
autocratic and democratic styles.
Japanese Perspectives on Leadership Behaviors (1 of 2)The
Performance-Maintenance (PM) Theory of leadership represents
a Japanese perspective, balancing task- and person-centered
leader behaviorsHas two dimensionsPerformance (similar to
task-centered)Maintenance (similar to person-centered)
Japanese Perspectives:
Performance Maintenance Theory (1 of 2)There are two

components of performance function:Planning component: the
leader works for or with subordinates to develop work
proceduresPressure component: the leader then pressures
employees to put forth more effort and to do good work
Contingency TheoriesThe Contingency Theories assume that the
appropriate style and leader depends on the situation.
Successful leaders choose leadership style based on situations.
There are two North American contingency theories of
leadership:Fiedler’s theory of leadershipPath-goal theory
Fiedler’s Theory of Leadership (1 of 2)Fiedler’s Theory of
Leadership holds that managers tend to be either task- or
person-centered leaders.Success depends on three contingencies
or characteristics of work situation:The relationship between
leader and subordinatesThe degree to which subordinates’ tasks
are clearly defined The officially granted power of the leader

Fiedler’s Theory of Leadership (2 of 2)Effective leadership
occurs when the leadership style matches the situation.Fiedler’s
Theory suggests that task-centered leadership works best in
situations that are either favorable or unfavorable for a leader.
Person-centered leadership works best in situations that are not
clearly favorable or unfavorable.
Exhibit 15.2:
Predictions of Leader Effectiveness under Different Conditions
Path-Goal Theory (1 of 2)Using Path-Goal Theory, a leader
might adopt one of four leadership styles, depending on the
situation. These four styles are:Directive (give subordinates

specific goals)Supportive (show concern for their
needs)Participative (consult with them and
encourage)Achievement-oriented (set goals and reward goal
accomplishments)
Exhibit 15.3:
A Simplified Model of Path-Goal Theory
Path-Goal Theory (2 of 2)Key leadership suggestions based on
path-goal theory:When subordinates have high achievement
needs, adopt the achievement-oriented style.For subordinates
with high social needs, adopt the supportive leadership
style.When the job is unstructured, adopt a directive style or an
achievement-oriented style.

Traits, Behaviors & Contingencies
Leaders have a variety of behaviors they can use to get the job
done.Most experts now believe that no one leadership trait or
behavior works best in all situations. A successful leader must
diagnose the situation, pick the behaviors and develop the
leadership traits that fit best.
National Context as a Contingency Model of Leadership (1 of
2)Successful leadership in multinational companies requires
that managers adjust their leadership styles to fit different
situations.Learn what local managers do to lead successfully in
their own countries.Use that knowledge to modify your
leadership style appropriately.

National Context as a Contingency Model of Leadership (2 of 2)
In a multinational setting, these components are all affected by
the national context:Leader behaviors & traitsSubordinates
characteristicsWork setting
Exhibit 15.4:
National-Context Contingency Model
of Leadership
Leadership Traits and Behaviors in the National Context (1 of
2)People prefer certain traits and behaviors in their leaders
depending on their cultural backgrounds, though some behaviors
& traits are cultural universals.GLOBE (Global Leadership and
Organizational Behavior Effectiveness) conducted cross-
national research of 60 nations on differences in
leadership.Their study contains insights that can help a manager
develop leadership styles to navigate successfully through a
maze of cultural settings.

Leadership Traits and Behaviors in the National Context (2 of
2)GLOBE findings:Leadership styles vary by country.Team-
oriented leaders preferred in Latin European, East European
and Southern Asian societies.Participative leaders are preferred
by Anglo, Nordic European, and Germanic European
cultures.Humane leaders preferred in Southern Asian
cultures.All agreed that autonomous leaders and self-protective
leaders universally impeded leadership.
National Context and Preferred Leader Influence
TacticsInfluence Tactics are tactical behaviors leaders use to
influence subordinates.U.S managers favor seven influence
tacticsAssertivenessFriendlinessReasoningBargainingSanctionin
gAppeals to a higher authorityCoalitions

Exhibit 15.8:
Preferred Leader Influence Tactics
in Four Countries
National Context and Subordinates’ Expectations
(1 of 2)The national context affects Subordinates’ Expectations:
what leaders “should” do and what they may or may not
do.Power distance has profound effects on expectations:In high
power-distance countries, autocratic leadership is expected. In
low power-distance countries, the leader should forego status
symbols, & involve subordinates in decision-making.
National Context and Subordinates’ Expectations (2 of 2)Other

cultural values affect subordinates’ expectations:Strong
masculinity norms lead to the acceptance of more authoritarian
leadershipStrong uncertainty-avoidance norms lead subordinates
to expect the leader to provide more detail in directions
Contemporary Leadership Perspectives:
Multinational ImplicationsThere are two contemporary
approaches to leadership:Transformational
LeadershipAttribution ApproachThe GLOBE study found that
Transformational Leadership was considered superior in almost
all societies.
Transformational Leadership
(1 of 2)The Transformational Leader:Articulates a visionBreaks

from the status quoProvides goals and a planGives meaning or a
purpose to goalsTakes risksIs motivated to leadBuilds a power
baseDemonstrates high ethical and moral standards
Transformational Leadership
(2 of 2)Transformational leaders succeed because subordinates
respond to them with high levels of performance, personal
devotion, reverence, excitement about leader’s ideas, and
willingness to sacrifice for the good of the
company.Transformational Leaders go beyond Transactional
Leadership which uses punishment and rewards. The same
leadership traits may not lead to transformational leadership in
all countries.
Attributions and Leadership (1 of 2)The attributional approach
to leadership emphasizes the leader’s attributions regarding the
causes of subordinates’ behaviors. In determining how to
respond to a subordinate’s behavior, the leader makes two key
distinctions: External attribution: factors outside the person and

beyond the person’s control (illness); or Internal attribution:
characteristics of the person (e.g., personality, motivation, low
ability, etc.)
Attributions and Leadership (2 of 2)Once leader makes an
attribution, the leader responds to the subordinate based on that
assumption.Internal attribution : behavior corrected or
rewardedExternal attribution: modify the work
environmentFundamental attribution error: an assumption by a
manager that people behave in certain ways because of internal
motivations, rather than outside factorsSuccessful leaders make
the correct attributions.
Getting the Results: Should You Do What Works at Home?The
contingency view of leadership suggests that managers cannot
assume that successful home leadership styles or traits will
result in equally successful leadership in a foreign country.
Managers need to modify and adapt leadership styles to be
congruent with the cultural setting.Without adequate cross-
cultural training, expatriates may continue to apply their

previously successful home style leadership in international
settings.
Exhibit 15.11: Leadership Behavior and Job Performance of
U.S. Managers in U.S. & Hong Kong
The Cultural Context and Suggested Leadership StylesBecause
of the extreme variability among cultures and nations, there are
few prescriptive theories of multicultural leadership. But there
may be some general recommendations based on research re
power distance & uncertainty: In high power distance cultures,
behave more autocratically.In high uncertainty cultures, remove
ambiguity from the work setting.

Exhibit 15.12:
National Culture and Recommended Leadership Styles
Summary and ConclusionsAll multinational managers should
strive to become global leaders.Chapter 15 provides important
information on the nature of leadership and understanding of
leadership in the international setting.The chapter also reviews
classic leadership theories and applies them to the international
settings.Effective leadership is essential for the success of the
multinational company.

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