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Leadership is found as an important function in human groups all over the world. Everywhere, the leadership role is associated with power and status. Most cultures have symbols that convey power and status. For example, in some cultures leaders may be recognizable by objects or clothing they alone are allowed to carry or wear by virtue of their position. Such symbols are also found in the business world. Examples from that sphere are company cars, job titles, or office location and size.

Status and power differentials are found everywhere, although they are more visible or stronger in some cultures than in others. Geert Hofstede, a cofounder of the Institute for Research on Intercultural Cooperation, refers to culture as the collective programming of the mind. Power distance is one of the four dimensions of cultural variability that Hofstede discussed in his well-known 1980 study of IBM employees in forty countries. The other dimensions he discussed were individualism-collectivism, masculinity-femininity, and uncertainty avoidance. In later research a fifth dimension emerged, labeled Confucian dynamism (or a long versus short term orientation). This entry focuses on the impact of power distance on leadership.

Hofstede defines power distance as the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally. Research has shown that power distance has a strong impact on organizational as well as personal functioning. For example, in a 1998 study, the researchers Randall Schuler and Nikolai Rogovsky found that the greater the power distance in society (that is, the more acceptance there is for unequal distribution of power in society), the less likely that companies in that society will have employee stock ownership plans. In the same year, the researcher Chet Robie and his colleagues reported that the relationship between job satisfaction and job level was weaker in low power distance cultures than in high power distance cultures.

Hofstede is not the only one to have studied power differentials as an important element of culture. All societies must find ways of eliciting responsible behavior from their members, but there are many different ways of doing so. Hierarchical cultures emphasize the chain of authority and rely on hierarchically structured roles. An unequal distribution of power and status is legitimate and expected. Employees are expected to comply with management's directives without questioning them. In contrast, egalitarian cultures encourage people to view each other as moral equals. Leaders motivate employees in a more participative manner and appeal to them to act on behalf of all. Employees typically have input into decisions and share in goal-setting activities.

In cultures with large differences in power between individuals, organizations will typically have more layers and the chain of command is felt to be more important. There is clearly a connection between power distance and leadership. For example, compared with their counterparts in low power distance countries, subordinates in high power distance countries are typically more reluctant to challenge their supervisors and more fearful of expressing disagreement with their managers. Not only are people in high power distance countries less likely to provide negative feedback to superiors spontaneously, the very idea that subordinates would be allowed to provide feedback is more likely to be rejected in high power distance countries, because such upward feedback may be perceived as threatening status positions.

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