Abstract
The purpose of this research paper is therefore to assess how cultural factors affect leadership behaviour and decision-making of the organisational leaders within the Australian MNCs. Serving the purpose of this research, the study adopts a qualitative research design with the collection of primary data through interviews. The participants selected are executives from leading MNCs like BHP, Rio Tinto, etc.
There are interesting differences between different countries and these results imply that cultures are divergent in terms of management and leadership. The study is useful to relevant stakeholders as it brings out characteristics and ways of developing cultural intelligence for great leadership across different organisations.
Introduction
In the modern context where MNCs function concerning cross-cultural management, it becomes vital to learn the effects that have cultural variables on leadership behaviours and choice patterns.
In this study, the concept of culture is taken to its extreme by examining a country with great cultural diversity like Australia before exploring how this external context impacts organisational leadership behaviours and strategic decisions.
This paper focuses on the case studies of leaders in global MNCs across the world to gain a richer understanding of the impact of culture on leadership and its decisions.
Aim and Objectives
Therefore, the main objective of this study is to understand how cultural factors impact leadership decisions in Australian MNCs. The specific objectives are:
- To find out the nature of leadership that is dominant within the Australian-based MNCs.
- To look at the relationship that cultural diversity has to decision-making.
- To look at what strategies leaders employ in order to better understand the effects that culture can have on leadership and decisions made in leadership positions.
Literature Review
Culturally, various differences affect management and hence literature on leadership and culture provides some insight. On Hofstede’s culture dimensions framework, which was developed in 1980, countries differ based on the dimensions including; individualism, power distance, uncertainty avoidance, masculine or feminine, and long-term or short-term orientation.
These dimensions affect leadership behaviours and decision-making patterns to a great extent. For example, Australia values individualism a lot with a score of 90 out of 100 and has a low score in power distance 36 out of 100 hence entails more penchant for egalitarian leadership practices that nurture independence besides embracing collaborative decision-making (Hofstede Insights, 2023).
Dickson, Den Hartog & Mitchelson (2003) in their research discovered that leadership in high-individualism cultures, for instance, tends to be transformational, that is, they encourage employees to change in certain ways and provide them with direction instead of using authoritarian tones and gestures. Also, in L—PDC, the leaders are more inclined to be participative, where the employees’ contribution prevails in decision-making.
However, as these studies give the general perspective of the cultural implications on leadership, it is required to study these factors about the Australian MNCs. The study presented by Kavanagh and Ashkanasy (2006) on Australian firms also finds that decision-making in culturally diverse teams is often a burden for leaders because of different cultural norms.
These differences could influence the level of cohesion; interaction patterns within such group work and, therefore, the overall performance of an organization.
Australia has one of the globally diverse workforces, where 30% of the country’s population was born in another country; there are over 300 ancestries identified (Australian Bureau of Statistics, 2022). This means that there is a big variety in culture when it comes to leadership, and appreciation of cultural factors that would help in managing and even deciding is crucial.
Methodology
Research Philosophy
This research work employs interpretivist research philosophy which seeks to understand the meanings that people bring forth to their behaviors in their natural settings. The purpose of the interpretive approach is to focus on the intricate effects of cultural factors on leadership practices as well as on the decision-making process, thus it provides detailed feedback regarding participants’ backgrounds.
Research Strategy
The research is classified under deductive research where the researcher begins by reviewing theories and literature on equality and diversity inclusion. The approach enables the realisation of these theories in the current practices of Vodafone, GSK, and Barclays to determine the extent of an inclusive workplace.
Research Choice
Based on the above factors, the research design is mono-method qualitative and the important tool of data collection is in-depth interviews. This approach makes it possible to describe leaders’ experiences and attitudes toward cultural factors affecting the ways they lead and decide.
Data Collection Methods
The primary data was obtained from semi-structured interviews conducted with fifteen senior officials from different departments of the BHP and Rio Tinto. The open-ended nature added credibility while still being able to standardize the interview process slightly so as to be able to branch off more frequently into other areas of concern.
Face-to-face interviews and interviews through video calls and screens as well were conducted depending on the participants’ choices and circumstances. All interviews took 45-75 mins and were audio-taped for transcription and analysis was done.
Sampling Strategy
To ensure that the participants were responsible for making key decisions on their organizations, purposive sampling was adopted to choose leaders of the targeted MNCs. This strategy made it possible to have a leaders’ sample from different functional areas like finance, operations, human resources, and marketing, thus, getting a wider view of the topic under research.
Sampling of target respondents was conducted by filtering out qualified participants who supervised multicultural teams and made strategic decisions relating to the global business environment.
Data Analysis Techniques
In patterns that emerged during the interview data analysis, specific subject areas that referred to culture issues running through the leadership and decision-making processes were identified using thematic coding.
This technique allowed for a structured approach to qualitative data analysis and thus revealed important findings of the impact of culture on leadership behaviours and plans in Australian MNCs. Data was analyzed qualitatively and the main ideas were grouped under large themes; Interviews conducted with the participants were used to provide quotes.
Findings and Discussion
This section also consisted of interviews with the leaders from BHP and Rio Tinto using semi-structured interviews. The findings are organized into four main themes that emerged from the data analysis: Topics included are Leadership Style, Cultural Diversity in Decision Making, Cross-Cultural Management and Cross-Cultural Management Strategies.
Leadership Style Adaptation
Summary: Robust interviews revealed that leaders from BHP and Rio Tinto have learnt to change their attitudes and behaviours in addressing employees’ cultural differences. This adaptation process tends to change from the authoritative, top-down approach to the more endearing, empathetic, and adaptable style of the organizational team.
Key Insights:
Transformational Leadership: The majority of leaders expressed their interest in the transformational leadership style that aims at inspiring people, giving them employees responsibility, and promoting creativity.
Example Quote: “I try to be more involved especially when dealing with a multicultural team so that everyone gets a fair shot at expressing themselves as much as I do” (P4, Marketing Head, Rio Tinto)
Situational Adaptability: Managers pointed out that they should regulate their behaviour about the cultural background of the employees.
Example Quote: “In my experience, one must not be afraid to change how he or she delivers the presentation based on the culture of other team members.”
Impact of Cultural Diversity on Decision-Making.
Summary: Cultural differences within a team hugely impact decision-making since the varied perspectives will result in better and more creative solutions. But it can also bring some complications and prolong the time taken to make decisions.
Key Insights:
Enhanced Decision Quality: Managers observed that it is valuable to have people from different cultures because they come with various perceptions regarding the problem or idea resulting in better scrutiny and creativity.
Example Quote: “I found the statement as very powerful and resonating knocking out the organisational culture of homogeneity which might create a monoculture: organisational culture Statements:”
Increased Complexity: The disadvantage of the pluralistic approach lies basically in the fact that the decision-making process tends to be more lengthy and encumbered due to the differences of opinion that need to be merged and the conflicts that have to be solved.
Example Quote: “It involves people taking a longer time to arrive at a consensus because each person comes with his/her perspective informed by his/her culture.” (P7, Head of Corporate Relations, Rio Tinto)
Challenges in Managing Cultural Differences
Summary: Several issues associated with cultural diversity arise in teams where such challenges include; Communication difficulties Different work cultures Different expectations about power and how decisions are made.
Key Challenges Identified:
Communication Barriers: Such factors include variations in linguistic ability and communication methods entail poor communication between the employees and affect group integration.
Example Quote: “Sometimes, the way people arrange the words may confuse, and therefore, there is a need to be very careful as to what is communicated in the process.”
Differing Expectations: Cultural differences in self-organizing particularly in matters concerning authority and decision making can be a disruptive force within the team.
Example Quote: “It is difficult to address the employees’ expectations as in some cultures, employees want the leadership to be more authoritative while other cultures expect to be consulted.”
Inclusive Leadership Tactics
Summary: In light of this it becomes crucial for leaders to apply certain techniques to manage diverse multicultural teams to capture the use of diversity towards a worthwhile function for the organisations.
Effective Strategies:
Open Communication and Feedback: Promoting discussions and understanding each worker’s contact from a cultural viewpoint to enable everyone’s opinion to be considered.
Example Quote: “Some of the culture that people have is that they can never speak what they want to say, and we make sure that is not with us.” (P5, IT Manager, BHP)
Cultural Sensitivity Training: Training the employees to tackle the issue of culture by dealing with issues that touch on cultural diversity.
Example Quote: “On diversity, we train our people culturally sensitive so that they learn to appreciate and embrace other people’s cultures.”
Inclusive Decision-Making Practices: Building the decision-making models that would involve the BV members as well as entail ways of arriving at a consensus.
Example Quote: “It is our effort to make the processes for decision-making as inclusive as possible and allow the others to speak up.”
Conclusion
It is therefore safe to conclude that cultural influence dominates the leadership practice and decision-making in competitive Australian MNCs. That’s why any leader who understands and respects those differences will be able to coordinate workers from different parts of the world more effectively and consequently increase the effectiveness of the organization.
Appendices
Appendix A: Interview Questions
General Background Questions
- What do you presently do for your organization? Please give a summary of your duties and responsibilities.
- Since assuming a leadership position at this organization how long have you been in this position?
- Self-Organised Teams: Leadership Style and Cultural Impact
- What kind of leader do you consider yourself?
- As far as you are concerned, how do you believe the cultural diversity of the members of the team affects your leadership?
- Do you have any experience when you practised cultural sensitivity in your leadership style?
Decision-Making Process
- How do diversity and multiculturalism affect your team and your choice-making?
- Do you have a particular case where culture was an influential factor whilst formulating decisions?
- How do you go about making sure that all parties are included when making a decision especially when working in a multicultural setting?
Adaptation and Flexibility
- What measures do you take as a manager to effectively transition through a specified culture while working with your subordinates?
- There are always issues of multiculturalism in handling people and you must rise to the challenge of meeting this need. How then have you managed to overcome these challenges in handling people from different cultural backgrounds?
Perceptions and Outcomes
- In your view, how efficient have you been in the leadership of cultural diversities or differences?
- According to your views, how does cultural sensitivity act as a success factor of an organization?
Open Feedback
- Besides, do you have any other comment regarding how cultural factors affect leadership and decision-making within your organization?
Appendix B: Consent Form Template This appendix provides the template used to obtain informed consent from participants, ensuring ethical compliance and voluntary participation. Informed Consent Form Title of Research: Critical Identification of the Influence of Cultural Factors on the Leadership Styles and Decision-Making Process of Organisational Leaders: A Case Study of Australia Researcher: [Researcher’s Name], [Institutional Affiliation] Purpose of the Research: The purpose of this study is to explore how cultural factors influence leadership styles and decision-making processes among organizational leaders in Australian multinational corporations (MNCs). Procedures: You are being asked to participate in a semi-structured interview that will last approximately 60 minutes. The interview will explore your experiences and perceptions regarding cultural influences on leadership and decision-making within your organization. Voluntary Participation: Your participation in this study is entirely voluntary. You are free to withdraw at any time without any penalty or consequence. Confidentiality: All information provided will be kept confidential and used solely for research purposes. Your identity will remain anonymous, and data will be reported in aggregate form. Contact Information: If you have any questions or concerns about this research, please contact [Researcher’s Name] at [Email Address] or [Phone Number]. By signing below, you indicate that you understand the information provided above and agree to participate in this study. Participant’s Signature: ______________________ Date: ______________________ |
References
- Australian Bureau of Statistics. (2022). Cultural diversity in Australia.
- Dickson, M. W., Den Hartog, D. N., & Mitchelson, J. K. (2003). Research on leadership in a cross-cultural context: Making progress, and raising new questions. The Leadership Quarterly, 14(6), 729-768.
- Hofstede, G. (1980). Culture’s Consequences: International Differences in Work-Related Values. Sage Publications.
- Hofstede Insights. (2023). Country Comparison: Australia.
- Kavanagh, M. H., & Ashkanasy, N. M. (2006). The impact of leadership and change management strategy on organizational culture and individual acceptance of change during a merger. British Journal of Management, 17(S1), S81-S103.
