Applied Research Methods for Business and Management
In order to expand the business around the world more and more industries are investing overseas. In an expanding global and diverse economy mix of races and culture exists. Therefore, increases the number of multinational organisations. Multinational organisation is also called Multinational Corporation. Porter (1990) defines MNC as ‘A multinational corporation (MNC) is usually defined as a company with operations in more than one country’. This requires a specific type of culture (organisational) which can be dependent on leadership. As Smith et al (1997) suggested that multinational organisations often attempt to either standardize their operations internationally or adapt to the local environment. In this sense, organisations must have specific leadership/management styles in their own operations.
As mentioned above leadership has been a major topic of research in psychology for almost a century which may be defined “the process in which one person influences others to accomplish an objective and directs the organization to accomplish a common task, Multicultural Leadership (Anon, 2009).” Organisational leadership involves processes and proximal outcomes that contribute to the development and achievement of organisational purpose (Klimoski & Zaccaro, 2001, p.6). Whereas National culture is not theorized as the only culture, or the totality of cultures, within a nation, but by definition it culturally distinguishes the members of one nation from another (Bond, M. & Hofstede, G., 1988).
HSBC bank is a multinational organisation which is also called world’s local bank where employees are more in charge of their own career and more transferable experience is expected for the leader (HSBC annual report 2009). HSBC bank is one of the largest banking and financial services organizations in functions such as credit and risk, finance, legal and compliance, and information technology, are based at HSBC’s Group Head Office. Its international network comprises some 300,000 employees in 88 countries and territories in Europe, Hong Kong, Rest of Asia-Pacific, the Middle East, North America and Latin America. HSBC is making a positive contribution to social and economic development by creating jobs in emerging markets (HSBC annual report2009).
HSBC 2009 annual report also concludes that in 2009, total revenue declined by 19% to US$66.2 billion. On an underlying basis, revenue grew by 8 per cent. If we consider the case in Hong Kong we can see that though the organization is the largest global bank in the market, there are still very limited opportunities to work in another country within the Group, except at the highest levels. Also it shows high bureaucracy and many levels of hierarchy (HSBC report2009).
There are many different leadership approaches as well as different types of multinational organizations with different geographical spread; different approach to adaptation, perhaps cultural diversity is a big issue in multinational organisation. As May (1997 p 308-309) points out that ‘Multinational organizations’ value chains spread around the world and this demands a new competence global leadership’. In order to be successful as a global leader one needs to be culturally sensitive, adapt in motivating diverse teams, creative, be able to run profitable organisations and develop successors to continue the organisation (Khan, A., 2007).
In broad leadership affects performance but different approaches to leadership may be required in the overseas operations of multinational organizations. Because some nations may only recruit and promote those individuals that fit the national, culture bound leadership model. This research will therefore investigate the cultural sensitivity of HSBC in particular the employees of HSBC in Hong Kong. The practical implication of this research would be to analyse the effect of culture on leadership skills in multinational organisations.
The aim of this study would be to investigate and find out ‘How effective is the leadership in the Hong Kong site and whether they have the necessary skills to lead a global business?’
Therefore, a) Examine ‘Leadership skills’ in HSBC in Hong Kong. b) Find out what is meant by ‘Effectiveness’ in terms of HSBC bank in Hong Kong c) Impact of culture in management leadership in multinational organization. d)Identify what type of training programmes would be more appropriate for the global leaders in order for the organization to maintained and improved in this competitive business world.
Global leadership skills are so important that they improve a company’s reputation and contribute to sustainable competitive advantage. In general global leadership skills refer to exercise effective leadership in a variety of countries (DuBrin, 2009). According to a research Global leadership can be defined as ‘which is able to operate effectively in a global environment and is respectful of cultural diversity, can manage accelerating change and differences, is open and flexible in approaching others, Can cope with situations and people disparate from his or her background and is willing to re-examine and alter personal attitudes and perceptions (Harris &Moran, 1996). Another article from Human resource management the author clearly pointed out that Global leaders must develop a strong portfolio of technical, interpersonal and conceptual skills appropriate for managing the most complex of all possible situations (Distefano &Maznevski, 2000, p.195).
In the past many researcher have attempted to conclude the very fundamental attributes and characters of an effective leader. “Leaders are generally responsible for overall organizational effectiveness as measured by production, efficiency, quality, flexibility, satisfaction, competitiveness and organizational development (Gibson et al., 2003).
The author further pointed out the theory of leadership. The Trait theory of leadership identifies three categories that are helpful in determining leadership successes: motivation, personality and ability. On the other hand the transactional theory of leadership emphasizes an “equitable transaction or exchange between leaders and followers by focusing on their mutual self interests (Rosenbach, 2003).” In the same article (Yeung & Ready, 1995) expresses that like all business leaders need especially strong skills in three areas: a) learning and adapting b) managing relationships and c) managing ambiguity.
An article by Khan illustrates that ‘understanding and the acceptance of others cultures can give leaders an advantage in successfully competing in global markets while the opposite may lead to catastrophic results (Khan, A., 2007). Therefore, culture is an important part of global leadership as MNC’s expand and setup business overseas the primary factor that they have to take into consideration. Cultural understanding of the native population where a corporation is venturing out is important as it will help to make the strategy accordingly. Leadership skills for global managers can be assessed using the Hofstede’s model of cultural diversity. Hofstede’s (1980) research has categorized countries based on being low or high in masculinity, individualism, uncertainty avoidance, and power distance.
According to Hofstede, the two dimensions of national culture that could impact diversity management are power distance and individualism. Countries high in power distance are characterized by a general understanding that power differentials are “normal and legitimate” (Hofstede, 1980). As an example, from the same article Hong Kong Chinese combine large power distance with weak uncertainty avoidance, collectivism, and are very long term oriented.
Being multicultural could be the best skill a global leader possesses. As DuBrin (2009, p.435) clearly mentioned ‘global leader must be multicultural’. The same Guru explains ‘global leaders have a leadership style that generates superior corporate performance in terms of four criteria: (1) profitability and productivity (2) continuity and efficiency (3) commitment and morale and (4) adaptability and innovation (DuBrin, 2009)’. The same author further point out that ‘A person with cultural sensitivity will recognise certain nuances in customs that help him/her to build better relationship with different people from different culture’.
Leadership and culture exhibits some similarities. As Kotter (1990, cited in Northouse, 2009.p.11) have argued that leadership and management are different and distinct construct and so have Bennis and Nanus (1985, cited in Northouse, 2009.p.11). The quality of being effective is very essential in any leadership. As Koestenbaum (2002, p.267) states “effectiveness in leadership requires Knowledge, experience, personal maturity and philosophical wisdom”.
This report has involved various sources and information which is important for any researcher investigates a multinational organisation. This section explains the processes and the approach taken of acquiring the data necessary for this study. It discusses and illustrates the various approaches taken to attain, analyse and determine the validity and reliability of the research methods used to acquire samples needed for this study.
It is vital to select the most appropriate research method when conducting a research in order to gain the necessary information and the necessary balance of information to answer the research question (Jill and Jones, 1997). The study of global leadership skills in a multinational organisation covers a wide arrange of sources, including facts, figures, news, opinions and theories, and obtaining the highest quality of information. The standards of a good research therefore will include exploring, describing, explaining, and finally evaluating the information (Ruane, 2005).
The case study approach plays an important role in research which deals with the complexity of effectiveness and the need for depth in the research investigation. Bell (1999) states “a case study approach is particularly appropriate for individual researchers because it gives an opportunity for one aspect of a problem to be studied in some depth within a limited time scale”. Whereas a survey is a “systematic collection of information from large study groups usually by means of interviews or questionnaires administered to samples of units of population” e.g. employee attitude survey (Hartley and Barling, 1998). The researcher suggests case study method to conduct this research along with an employee survey because case study method is a qualitative method (Gerring, 2007). The e-mail addresses of employees could be taken from the human resources department.
It also because the researcher would study the particular problem in depth only in a particular multinational organisaiton and there is no mean to generalise the findings to other organisations or industries. In this research the evaluations are based on qualitative data which may be defined as “the research is that involves analysing and interpreting texts and interviews in order to discover meaningful patterns descriptive of a particular phenomenon (Auerbach & Silverstein, 2003, p.3)”
As the research is qualitative the researcher decided that inductive analysis would be constructive because the inductive method allows theory to be constructed from the outline emerging from research data (Henn et al. 2006 cited in Brown 2008, p 191). However, Saunders et al. (2007, p.120) further points out that unlike the deductive method, inductive method is more flexible and uses qualitative data. For this reason the researcher would be using the inductive method.
Data collection method
The researcher planned to collect primary data by emailing or posting survey questionnaire to the leaders in the chosen organisation asking their experience working in a multinational organisation. The questionnaire is distributed with a covering letter from the International Human Resource Manager of HSBC, assuring the confidentiality. Completed questionnaires are to be e-mailed back to the researcher. Because of difficulty to reach individual leaders in all parts of business, time and cost consumption the researcher suggests this data collection method rather than conducting face to face interviews. Furthermore, it generally results in a higher response rate and faster than other methods.
Questionnaires provide the main substance of this report, and were designed to be answered in less than 10 minutes. These questionnaires were sent by both post and email depending on availability of email. Emailing questionnaires provide the researcher with quicker responses than the free post as the researcher has to wait for the post. These questions were to acquire quantitative data; therefore closed questions were mainly used. Another reason for choosing the closed questions were because they require less strain on the respondent, disregard literacy levels can provide quick answers remaining within the time limit, and easy for the researcher to analyse and ‘code’. (Commons, 2009) The questions aimed to target behaviour, attitudes as well as personal details.
The aim of questionnaires are to gather information and views on global leadership skills in multinational organisation, therefore the researcher made certain that each question encompassed this area. Each question was to achieve the aim and objectives of this research, and information was to achieve reaching this goals. At the planning stage the researcher made sure that each question revealed information which are needed and not merely wanted. To maximise the success of the questionnaire, the researcher applied various techniques such as giving the questionnaire a meaningful title, keeping questions short and succinct as possible, offering incentives for the return of questionnaire, and providing the prepaid self reply envelopes with each questionnaire. (Gillham, 2000). A letter enclosed in each questionnaire described the reason for the research and that each reply could contribute to existing as well as expatriated individuals.
The instructions were thus clear and provided respondents the researcher’s name, position, the purpose of the questionnaire, and the researcher stated that personal information would not be used for any other purpose other than this research and their personal data would be regarded as confidential and each respondents name given anonymity. Finally detailed instruction on returning the pre paid questionnaire back for review. Following data is collected from each individual through the questionnaire.
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