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340 PART 4: THE LEADER AS A RELATIONSHIP BUILDER
of the term diversity presents problems. In many European languages, the closest
word implies separation rather than the inclusion sought by U.S. diversity pro-
grams. Foreign fi rms doing business in the United States face similar challenges
61
understanding and dealing with diversity issues. For example, Japanese leaders at
Toyota Motor Company seriously bungled the handling of a sexual harassment
complaint in the company’s North American division, leading to a lawsuit. When
Sayaka Kobayashi sent a letter to Dennis Cuneo, senior vice president of Toyota
North America, saying she had endured months of romantic and sexual advances
from her boss, Cuneo told her he would discuss the issue with the boss, Hideaki
Otaka. However, Cuneo allegedly said that he didn’t want to offend the man (a
cultural norm), so he planned to say it was Kobayashi’s boyfriend who was upset
about the overtures. European companies have also been tripped up because of a
lack of understanding of the American concept of sexual harassment, according
to employment lawyer Wayne N. Outten. “There are some European countries
where a certain degree of what we would consider over-the-line . . . is
more the norm in the culture,” Outten says. 62
Action Memo
National cultures are intangible, pervasive, and diffi cult to
comprehend. However, it is imperative that leaders in international
Social value differences can signifi cantly
organizations learn to understand local cultures and deal with them
affect leadership, working relationships,
effectively. As C.R. “Dick” Shoemate, chairman and CEO of Best-
and organizational functioning. Answer the
foods, says, “It takes a special kind of leadership to deal with the dif-
questions in Leader’s Self-Insight 11.3 to
ferences in a multicountry, multicultural organization. . . .” Bestfoods
better understand the social values of your
classmates or coworkers.
uses cross-border assignments and extensive individual coaching to
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train people to lead in different cultures. One approach to under-
standing other cultures is to look at how social value systems differ.
Social Value Systems
Research done by Geert Hofstede on IBM employees in 40 countries discovered
that mind-set and cultural values on issues such as individualism versus collectiv-
ism strongly influence organizational and employee relationships and vary widely

Power distance 64
Power distance
how much people accept equality among cultures. Exhibit 11.4 shows examples of how countries rate on four
how much people accept equality
in power; high power distance
in power; high power distance signifi cant dimensions.
refl ects an acceptance of power
refl ects an acceptance of power
inequality among institutions,
inequality among institutions, • Power distance. High power distance means people accept inequality in
organizations, and individuals.
organizations, and individuals. power among institutions, organizations, and individuals. Low power
Low power distance means
Low power distance means
people expect equality in power
people expect equality in power distance means people expect equality in power. Countries that value high
power distance are Malaysia, the Philippines, and Panama. Countries that
Uncertainty avoidance
Uncertainty avoidance value low power distance include Denmark, Austria, and Israel.
the degree to which members
the degree to which members
of a society feel uncomfortable
of a society feel uncomfortable • Uncertainty avoidance. High uncertainty avoidance means that members of
with uncertainty and ambiguity
with uncertainty and ambiguity a society feel uncomfortable with uncertainty and ambiguity and thus
and thus support beliefs and
and thus support beliefs and
behaviors that promise certainty support beliefs and behaviors that promise certainty and conformity.
behaviors that promise certainty
and conformity Low uncertainty avoidance means that people have a high tolerance for
and conformity
the unstructured, the unclear, and the unpredictable. High uncertainty
Individualism
Individualism
a value for a loosely knit social
a value for a loosely knit social avoidance cultures include Greece, Portugal, and Uruguay. Singapore and
framework in which individuals
framework in which individuals Jamaica are two countries with low uncertainty avoidance values.
are expected to take care of
are expected to take care of
themselves • Individualism and collectivism. Individualism reflects a value for a loosely
themselves
knit social framework in which individuals are expected to take care of
Collectivism
Collectivism themselves. Collectivism is a preference for a tightly knit social framework
a preference for a tightly knit
a preference for a tightly knit in which people look out for one another and organizations protect their
social framework in which
social framework in which
people look out for one another
people look out for one another members’ interests. Countries with individualist values include the United
and organizations protect their
and organizations protect their States, Great Britain, and Canada. Countries with collectivist values are
members’ interests
members’ interests Guatemala, Ecuador, and Panama.