Essay Sample on Literature Review: Leading Multicultural Teams

Multicultural teams play vital roles that affect the overall performance and competitiveness of an organization. Research has indicated that globalization and its new realities for businesses in the global economy drive the need for culturally diverse employees (Jang, 2017). Recruitment of employees from different backgrounds is increasingly becoming prevalent in the present-day global economy because it is a vital tool for collaboration. According to Jang (2017), the literature is in consensus that multicultural teams can improve innovation and organizational creativity. The reason is that culturally diverse human resources can leverage knowledge and ideas from different backgrounds for creative outcomes (Jang, 2017).

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Nonetheless, assembling multicultural employees does not translate to high levels of innovation and creativity if leaders lack the skills and knowledge to manage teams from different backgrounds. As such, cultural diversity can not only be a vital resource to an organization but may also function as a barrier to team effectiveness. Research has demonstrated that inconsistent norms can emerge from cultural differences between group members where there is ineffective cross-cultural leadership (Jang, 2017). These aspects illustrate the importance of leaders having core skills and knowledge in managing multicultural teams to realize their benefits.

Leadership Styles in Multicultural Teams

Transformational and Transactional Leadership

Several studies have examined the effectiveness of different leadership models in cross-cultural environments. According to Shazeb (2017), many social science researchers have hypothesised that the transformational leadership style produces the best leaders in multicultural settings. This approach to leadership is also called charismatic leadership. This model’s universal effectiveness in leading diverse teams is based on the idea that its principles focus on shaping the personality of a leader rather than a way of exercising authority (Shazeb, 2017). There is also evidence that transformational leaders are effective in inspiring cross-cultural teams to work together (Shazeb, 2017). Accordingly, this leadership style can be used to lead multicultural groups in the United Arab Emirates because of its universal effectiveness across cultures.

Additionally, the most noteworthy studies in the GLOBE project have produced evidence that supports the strengths of charismatic or transformational leadership in cross-cultural settings (Shazeb, 2017). A significant proportion of studies in this project endorsed key features of transformational leadership as useful for leading multicultural groups (Shazeb, 2017). Its universal features include "motivating", "encouraging", "excellence-oriented", "confidence-building," "foresight" and "dynamic." Shazeb (2017) argued that evidence underlying the GLOBE project has massive support substantiating the effectiveness of charismatic leadership.

Research by Ora (2016) also supports the use of transformational leadership in multicultural environments. However, the author said transactional leadership should as well be considered for building effective cross-cultural teams (Ora, 2016). Transactional leadership is useful to any organization, especially in the initial stage of assembling teams from diverse cultures. This leadership style is essential in the initial stage because expectations for success and team behaviours from the employees are still unclear (Ora, 2016). Transactional leadership theory encourages the use of contingent rewards and price rewards to motivate followers. In the context of culturally diverse groups, leaders can use such rewards to inspire and challenge team members to work towards the achievement of common goals and objectives. It is for this reason that transactional leadership is useful in diverse or cross-cultural environments.

Rahman (2019) found that there is a strong correlation between transformational leadership and one's ability to manoeuvre culturally diverse settings. This style of leadership has characteristics that are required to run successful multicultural teams. According to Rahman (2019), transformational leadership produces charismatic leaders not only in pure economic contexts but also in social exchange. Key features of this leadership technique that makes it ideal for leading diverse human resources are high levels of trust, respect, loyalty, and satisfaction. Besides, it has been associated with a high level of effort, emotional attachment, and admiration (Rahman, 2019). Transformational leaders also have a strong sense of ethical principles, which are related to the successful management of multicultural workgroups.

Nevertheless, some scholars have disputed the universal relevance of transformational leadership in diverse workplaces (Muenjohn & Armstrong, 2017). Cross-cultural studies that used data from collectivistic and individualistic countries indicated that culture moderated the correlation between transformational leadership and the extensiveness of social networks (Shazeb, 2017). This phenomenon implies that charismatic leadership has no universal significance because its effectiveness varies with the composition of multicultural groups. Another study indicated that charismatic leadership did not result in the effective management of multicultural teams in several Middle East nations and India (Shazeb, 2017).

A review of cross-cultural studies on the usefulness of transactional and transformative approaches to leadership concluded that the former is more effective than the letter (Bhargavi & Omar, 2016). This research further showed that the two methods have universal distinctions across different cultures (Bhargavi & Omar, 2016). Studies in individualistic cultures also replicated these research findings. In such cultures, however, the perception of employees about the charisma of leaders in culturally diverse settings depends on how well individual leaders fit in the characteristics of being competent and good leader (Bhargavi & Omar, 2016).

The theory of transformational leadership has essential strengths that match the requirements for ideal leadership in multicultural teams. Muenjohn and Armstrong (2017) said one of the core focus of transformational leaders is to enhance followers' awareness of what is important and right. This aspect mirrors the characteristic of effective cross-cultural leadership, which aim at helping team members to understand their diversity and how to leverage to improve performance. Again, this tenet is the basis of establishing culturally-sensitive leadership where team members have mutual respect. Muenjohn and Armstrong (2017) further said transformational leadership is associated with encouraging the followers to have common goals rather than focusing on self-interests. This attribute is also vital for successful leadership in a culturally diverse group. In a broader sense, the idea brings to light key tenets or principles of effective leadership and management in multicultural teams.

In the literature, research has demonstrated that transformational leadership, on average, boosts the level of satisfaction among subordinates, and it contributes to higher effectiveness and extra effort (Muenjohn & Armstrong, 2017). Several studies have also associated transactional leadership with positive performance outcomes in both less multicultural and cross-cultural settings (Muenjohn & Armstrong, 2017). These pieces of evidence imply that transactional and transformational leadership produce positive results when applied to lead multicultural teams.

Servant Leadership and Laissez-Faire Leadership

While there is no consensus on the universal effectiveness of servant leadership, there is evidence that it helps create an appropriate climate for the proper functioning of culturally diverse groups (Ora, 2016). The core element of this approach to leadership that helps managers to lead multicultural teams is the ethic of caring. Ora (2016) noted that the tenet of caring for followers is of great importance in building trust and cooperative relationships between employees from different cultural backgrounds. In this leadership model, a person first becomes a servant before taking any position that confers the authority to guide others.

Core principles of servant leadership style place an individual in a better position to lead culturally diverse employees appropriately. This leadership approach emphasizes the culture of valuing all team members, encouraging respect and trust among them (Ora, 2016). Moreover, servant leadership values individual strengths and emphasis on empathy, acceptance, and listening (Ora, 2016). Because of these features, servant leaders tend to focus on the needs of their followers, helping them become powerful and autonomous people. The themes of appreciating diversity, fostering collaboration, and empowering individuals make servant leadership an ideal approach of leading culturally diverse groups.

Additionally, models of servant leadership emphasise the quality of services that the followers can obtain from their leaders. So the fundamental responsibility of leaders in this leadership model is to prioritise services to followers. The outcome of servant leadership is that it makes the followers more autonomous, wiser, and healthier (Bhargavi & Omar, 2016). It values core tenets of moral authority, such as commitment to a worthy cause.

Key functional characteristics of servant leadership, which can help managers to build and run effective multicultural teams, can be categorized as appreciating others, integrity, empowerment, trust, honesty, and modeling (Bhargavi & Omar, 2016). Other essential attributes are vision, empowerment, and pioneering. These characteristics translate into traits and attributes such as stewardship, visibility, competence, encouragement, communication, persuasion, credibility, listening, and delegation (Bhargavi & Omar, 2016).

One of the proposed models of this leadership approach stipulates that value impacts servant leadership, which, in turn, affects organizational performance. However, Bhargavi and Omar (2016) said scholars have argued that this model has weaknesses because it fails to define independent variables underlying the value component. Again, it does not give a hypothesis on the source of values that lowers the performance of an organization (Bhargavi & Omar, 2016).

Laissez-faire leadership empowers followers to perform their tasks and execute their mandates autonomously. Still, individuals working under laissez-faire leaders may need to seek assistance from supervisors within the organisation or alternative sources. However, this leadership model has critical weaknesses that make it ineffective style for leading multicultural teams. First, it downplays the role of leaders by allowing them to avoid their functions. Secondly, it can reduce the cohesiveness of a workgroup, and thirdly, its use makes it difficult to adapt to changing situations. In this view, the absence of leaders to guide the team, set goals, and solve conflicts shows that this model is not the best approach to leading multicultural teams.

Since culturally diverse groups are prone to conflicts and disagreements that emerge from misunderstanding and communication, laissez-faire leadership is ineffective for managing people from diverse cultures. Muenjohn and Armstrong (2017) said several studies have confirmed that this leadership style has a negative correlation with all the measures of performance outcome. Thus, laissez-faire leadership can lead to a decline in the productivity of culturally diverse teams.