Proposed SolutionThe authors ascribe to the importance of staff empowerment, a continuously improving employee skill set, the partnership approach, and to the general consensus that there is no single all-encompassing leadership style that addresses all situations. Managing a crisis demands a different leadership approach than devising a management plan or supervising operations. The Chinese character for “crisis” is a combination of the characters for “danger” and “opportunity”. When faced with crises a leader can elect to engage in a reactive (preserve), proactive (opportunistic), or combination (both reactive and proactive) approach (Brumfield, 2012, p. 47).

The current day economic sector displays characteristics of rapid technological changes, complex regulatory modifications, and volatile market conditions. The multifaceted nature of “business” therefore requires a “full range leadership model” (Obiwuru, Okwu, Akpa, & Nankwaere, 2011, p. 103) approach that might involve the application of more than one leadership style. In addition, each individual is inherently unique and each situation consists of a set of distinct characteristics resulting in a large amount of different combinations. Managers are frequently prompted to wear a different leadership hat depending on the context. Context, therefore, determines the application and effectiveness of a leadership style, hence, the choice of the term “contextual leadership” style.

The authors further distinguish three phases in the contextual leadership approach, (1) a core hybrid skill set employing basic elements of various leadership styles, (2) a situational leadership phase, and (3) the autocratic phase.

The core of the “contextual leadership” skill set consists of elements of the servant, executive, charismatic, and transformational leadership approaches. Their associated problem solving, innovation and efficiency competencies are proven to promote employee empowerment, buy-in, and team building skills, which the authors believes to be best suited to adapt to the changing environment. When a crisis situation occurs, the manager will employ leadership actions based on the degree of employee readiness and the organizational context. Addressing a crisis requires an immediate assessment and decisive response from either a competent employee or the supervisor. The manager will delegate the responsibilities to a properly trained and qualified staff member, or if employee readiness is lacking, will personally remedy the situation. The contextual leadership style, therefore, offers a flexible, omnificent solution to the challenging economic environment of the current era.

It is the authors’ view that the contextual leadership style, in consideration of the global economic environment, needs to be culturally-linked. Drawing from Hofstede’s (1980) research on cross-cultural psychology, the authors suggest that leadership styles are strongly aligned with accepted leadership approaches in specific cultures. A contrast of leadership-styles and preferred leader-subordinate relationship supports this conclusion as the Power Distance Index demonstrates how a particular culture values and respects authority (Gladwell, 2008). Malaysia, characterized by high power distance, aligns strongly with transactional leadership. Their collectivist culture focuses on group harmony and maintaining relationships rendering this predominant paternalistic leadership style inherently culture-specific. On the other hand, Australian leadership-style tends to be transformational. Managers in Australia are viewed more as co-coordinators allowing for more direct disagreements and open discussions. Therefore, the Australian culture develops manager’s skill sets to be participative, consulting and cooperative in the decision-making process. Leadership styles are not only situational-dependent but they are also culturally-contingent (Jogulu, 2010).

Building upon Hofstede’s research, the GLOBE Project (1980) study of 62 nations over an 11 year period attempted to determine how leadership and leader’s styles vary among nations and cultures. This research of roughly 17,200 middle managers produced data in two categories: cultural dimensions and culture clusters. Significant findings in this study revealed that of the 65 leadership traits deemed important for subordinates, 22 of these styles were found to be universally desirable characteristics. Conversely, eight (8) leadership traits were found to be universally undesirable. The remaining leadership characteristics were categorized as culturally contingent (Hoppe, 2007). The findings in this study support the claim that culture is a key defining element in leadership, and that the “global data” provides a universal vantage point regarding the relationship between culture, leadership and followership.