Cross-Cultural Leadership Styles: A Comparative Study of U.S. and Nigerian Financial Institutions

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ABSTRACT

The purpose of this study was to explore the interaction between elements of national culture and leadership styles, and empirically compare leadership styles of Nigerian and United States managers in financial institutions. Leadership styles of Initiating Structure and Consideration were measured with the Leadership Opinion Questionnaire and used to estimate, evaluate and explain the influence of national cultural values, gender, age, religious belief, and educational qualifications on leadership behavior of business managers from both countries. Completed questionnaires from 103 U.S. and 108 Nigerian respondents, with reliability coefficients (Cronbach's Alpha) ranging from .71 to .81 were analyzed. Results of this study revealed significant differences in Initiating Structure and Consideration leadership styles between the United States and Nigerian managers in financial institutions and lend support to Hofstede's 1985 findings. The differences were primarily due to the influence of national culture. The combined effect of gender and country of nationality also demonstrated significance in Initiating Structure leadership style. No significant differences were found in the two leadership styles considered due to age, religious belief or educational qualifications. Results of this study will be useful to the international business community, especially firms seeking business ventures in Nigeria for training employees for assignments in Nigeria or hiring qualified Nigerians for management level positions.

INTRODUCTION

This research explores the interaction between elements of national culture and leadership styles, and empirically compares leadership styles of United States and Nigerian managers in financial institutions. The basic theory in this research is the two-factor theory of leadership (The Ohio State University Leadership Studies), which narrowed the description of leadership behavior into two separate dimensions, Initiating Structure and Consideration. Other supporting theories included those developed by Hofstede (1980), Gibson (1995), and Safranski and Kwon (1988). Leadership styles of Initiating Structure and Consideration (Fleishman, 1989) will be used to estimate, evaluate and explain the influence of national cultural values, gender, age, religious belief, and educational qualification on leadership styles of managers from both countries. Knowledge and understanding of cross-cultural and cross-national similarities and differences in leadership styles between these two countries will benefit the international business community, especially multinational corporations considering joint ventures or foreign direct investment (FDI) in Nigeria. These firms can use the results of this study to prepare and train their management staff for assignments in Nigeria or hire qualified Nigerians for top management positions.

People from different cultures develop certain patterns of life, philosophy and value systems, which influence their behavior and leadership styles. Business experience abroad has shown how widely these leadership styles vary from country to country, and from culture to culture (Trompenaars, 1993). In order to lead effectively in another culture, a leader must understand the social values, customs, norms, leadership behavior and work-related cultural values of the host country's workforce (Fatehi, 1996).

Cultural differences influence leadership styles, norms, role expectations, and traditions governing the relationship among various members of society. These are strong determinants of effective leadership behavior in a society (Fatehi, 1996). Fatehi argues that what constitutes a good leader in one culture may not constitute a good leader in other cultures. He stated that in the United States of America, for example, people would prefer democratic leaders who seek input from subordinates before making decisions. In other cultures, such would be regarded as incompetence or lack of knowledge on the part of the leader. …