The Role of Cross-Cultural Leadership in International Business Success

Abstract

A leader’s success increasingly depends on their ability to effectively lead a diverse global workforce across a variety of business cultures. The purpose of this study is to examine the influence of cross-cultural leadership on international business success, integrating the leadership models of transformational, transactional, and servant leadership with cultural intelligence and organizational adaptation. A mixed methods study was utilized with 312 executives and managers across North America, Europe, Asia-Pacific and Latin America surveyed on leadership behaviors, while multiple international business case studies were developed for multinational corporations. Structural equation modeling (SEM) and regression were conducted to determine the direct, indirect and moderating effects. Transformational leadership was the strongest predictor of business success (β = 0.41, p < 0.001) followed by servant (β = 0.29, p = 0.012) and transactional leadership (β = 0.25, p = 0.034). Cultural intelligence was found to significantly moderate the relationship between leadership styles and organizational adaptation (β = 0.18, p = 0.027). Organizational adaptation mediated the impact of leadership styles on business performance. Pearson correlations also demonstrated positive relationships between effective leadership, cultural intelligence, and international business success (r = 0.42, p < 0.001). This paper adds to the international business literature through the development and testing of an integrated model of leadership styles, cultural intelligence, and organizational adaptation. Implications for practice of leadership suggest leaders should undertake cultural intelligence training, should adapt via changes in their organizations, and should have cross-cultural interactions in training programs. Suggestions for future research suggest studies should utilize a longitudinal design, include a diverse variety of industries, and investigate the effect of e-collaboration technologies in raising leaders' cross-cultural effectiveness.