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Abstract

The focus on globalization and multiculturalism has emphasised the importance of understanding Organizational productivity and team effectiveness. However, Organizational productivity and team effectiveness largely depend on the effectiveness of leadership styles and their effect on Organizational success. Leadership styles are however subject to different personal, Organizational, and cultural factors that need further investigations. An understanding of the business context is an effective approach for doing so. This paper focuses on the UAE business context by evaluating and comparing leadership styles in the UAE and their effect on the competitiveness of the country. Mainly, this paper evaluates the UAE leadership styles, from the private sector and public sector perspectives, through an analysis of two case studies and an assessment of the views of employees and managers in the UAE. Broadly, this paper establishes that most UAE Organizations are government and family-owned. The main leadership styles that prevail in these Organizations are the authoritative and consultative leadership styles. Evidence shows that although these leadership styles are uncompetitive in todays global business environment, they reflect the UAE cultural practices. To improve the countrys competitiveness, this paper recommends the adoption of the participative and transformational leadership styles. This recommendation stems from the realisation that all leaders and managers in the UAE should appreciate the importance of structural flexibility in their leadership approaches to maximise employee output and Organizational productivity.

Glossary of Abbreviations

CEO Chief Executive Officer
FDI Foreign Direct Investments
GDP Gross Domestic Product
NHS National Health Service
TQM -Total quality management
UAE United Arab Emirates
UK United Kingdom

Introduction

Many people have different interpretations of leadership. These differences come from the varied understanding of the concept. Fatokun & Salaam (2010) say leadership involves several factors including employee motivation, inclusion of employee opinions in decision-making, and the encouragement of people to achieve their personal and Organizational goals. Broadly, a leader is someone who has the power and influence to affect Organizational behaviour. Recent interpretations of leadership and its effects on Organizational performance show that leadership is a personal attempt to influence employee behaviour and Organizational performance (Timothy & Andy 2011). Since most people participate in Organizational activities to pursue personal goals, their commitment to participate in the Organization largely depends on how they believe the Organization will help them to achieve their personal goals (Fatokun & Salaam 2010). Conversely, many people will be committed to work in an Organization that will help them to meet their personal goals and objectives. The failure to realise this outcome may negatively affect employees commitment to an Organization.

Leadership styles often play an instrumental role in easing, or inhibiting, the willingness of employees to contribute to Organizational activities (Lieberson & OConnor 1972). Thus, managers search for leadership styles that resonate with the ambitions of their employees.

The importance of leadership styles on Organizational productivity does not however end on influencing employee commitment alone; an employees ability to harness Organizational resources also largely depends on leadership management styles. Relative to this view, Timothy & Andy (2011) say, Efficiency in resource mobilisation, allocation, utilisation, and enhancement of Organizational performance depends, to a large extent, on leadership style, among other factors (p. 100).

Many Organizations lag behind in adapting to the demands of todays economic times. More specifically, most leadership styles fail to augur well with the current demands of a competitive global environment. As such, many businesses do not operate to their full potential. Firms operating in the United Arab Emirates (UAE) are not exempt from this flaw. Indeed, Syed & Özbilgin (2010) say most UAE firms face a leadership challenge that inhibits their competitive advantages and ability to stay afloat in a fiercely competitive global economy. Through this understanding, this paper brings to the fore, the importance of flexible leadership, as a strategy for businesses to cope with todays demanding global environment. To achieve this objective, this paper evaluates the influence of leadership and management styles in influencing the Organizational performance of UAE firms.

Rationale

Many countries have experienced the effects of a rapidly changing globalised world. The UAE is a part of it. Internally, the UAE faces several social and political challenges that affect the public and private spheres of the countrys existence. Some public sector challenges include social and political imbalances that stem from social and economic problems (such as unemployment, skewed income distribution, and fractures in the federal framework) (Facts on File Incorporated 2008). Besides, as an offshoot of these public sector problems, the UAE still faces several environmental challenges that threaten the countrys water resources, marine life, and the quality of atmospheric conditions (these environmental factors support the countrys growing population and the vibrant tourism sector) (World Economic Forum 2007).

Private sector challenges in the UAE mainly mirror attempts by new enterprises to seek relevance in the largely government-dominated UAE business environment. Since the government cannot effectively meet all of UAEs social and economic needs, or solve the countrys complex economic problems, it has been imperative to include private sector participation in propelling the countrys growth. However, private enterprises face several challenges associated with differing national cultures, succession politics, lack of adequate capital, nepotism, difficulties in securing government contracts, strict laws and regulations, lack of employee coherence among other factors (Humby & Hunt 2008).

This paper realises the role of leadership and management styles in solving most of these national problems. In detail, this paper relies on the fact that effective management and leadership styles may possibly solve the environmental, social, economic, and political challenges facing the country. A key motivator for adopting this approach is the instrumental role that private-public partnerships have contributed to solving some of these challenges. It is therefore unsurprising that the research questions for this paper largely take a private and public approach. Stated differently, the research questions intend to explore how the government and private sector Organizations aim to improve their productivity and efficiencies through the adoption of sound leadership and management styles. The focus on private and public sector Organizations arises from the fact that both groups of Organizations usually have a different set of work ethos and Organizational objectives (although their contributions are essential for the sustenance of growth in a growing economy such as UAEs). Therefore, by understanding the differences in the leadership and management styles of government and private Organizations in the UAE, it would be easy to understand how local enterprises in the UAE can improve their efficiency and competitiveness in the wake of global competition.

Research Aim

To explore how UAE Organizations cope with the demanding global environment through the adoption of effective leadership styles.Hypothesis

UAE Organizations cope with the demanding global business environment by adopting a mix of culturally acceptable leadership styles.

Research objectives

To identify the best working practices of leadership in the UAE
To find out if there is a need for different leadership styles in the UAE public and private sectors
To recommend appropriate leadership styles for government and private Organizations in the UAE
To establish the importance of individual awareness to higher management levels

Outline Methodology

As explained above, this dissertation is a product of the adoption of a mixed research approach. The collection of data occurred through structured questionnaires, surveys, and case studies. In sum, the interviewees and respondents included experts in the field of leadership and management and public and private sector managers in the UAE. The case studies included a representative analysis of UAE Organizations in the private and private sectors.

Literature Review

Introduction

This chapter reviews the works of previous researchers who have investigated the correlation between leadership and management styles. Through a multifaceted approach of investigating the predominant leadership style in UAEs public and private sectors, this chapter investigates the best working practices informing sound leadership styles, the distinction between leadership styles in the private and public sectors, the appropriate leadership styles for the private and public sector, and the importance of individual awareness to leadership styles.

Best Working Practices of Leadership Management Style in the UAE

Depending on the Organizational context, many observers have often questioned the best type of leadership style that would be appropriate for an Organization (Derel 2003; Winkler 2010; Northouse 2010). This debate especially surfaces from the existence of different leadership styles and Organizational goals in the UAE. At the centre of this analysis lies the need to understand the theoretical underpinnings of leadership. Winkler (2010) says leadership is a complex concept that has birthed many theories, models, and operational paradigms. Early theoretical constructs tried to establish if leadership was an innate trait, or an acquired trait (Arnold 2011). The trait theory is one approach that developed from this debate because it suggested that leadership was an innate phenomenon (inborn) (USA International Business Publications 2007).

This view prevailed in most parts of the 1940s, 1950s and 1960s, until new evidence showed the strength of behavioural theories in understanding leadership styles (NHS 2013). These theories mainly suggested that leadership styles were products of personal behaviours. The contingency approach is one model that developed from this ideological shift because it proposed that effective leaders adapted best to their Organizational situations (Bennis 1994). Max Weber introduced a new wave of theoretical evidence that emphasised on the role of vision and charisma in understanding leadership styles (Winkler 2010). Through this ideology, a new group of researchers emerged with the goal of investigating the potential of leaders heading groups of people without any sanctioned office (later, the concepts of transactional and transformational leadership also emerged from this analysis) (Derel 2003).

Although the above studies portray a universal attempt to understand the best working practices that support leadership styles, there have been localised attempts to investigate the same phenomenon in the UAE. Indeed, based on the different influences of national ethos on leadership styles, many researchers have focused on investigating dominant leadership styles in the UAE. Most of these researchers have focused on analysing the UAE leadership styles by concentrating on the UAE construction sector (Peck & Dickinson 2008; Syed & Özbilgin 2010).

The construction industry is a significant part of the UAE economy. A survey of three companies in the UAE showed that the consultative and consensus leadership styles were more predominant in this sector (Randeree & Chaudhry 2007). While many researchers caution against generalising western and eastern leadership styles (Syed & Özbilgin 2010), more than 50% of respondents in a study conducted by Baumüller (2007) to evaluate the impact of leadership styles in the UAE construction sector argued that the choice of leadership style significantly affected their levels of job satisfaction. Through the strong influence of leadership styles on Organizational performance, Davies (2007) also established that the choice of leadership style in the construction sector affected employee commitment. These findings also hinted at a strong preference for participative and democratic leadership styles in the UAE construction industry.

Based on the above findings, Syed & Özbilgin (2010) say the adoption of consensus as a key tenet of UAEs leadership style stem from the fact that the UAE is a culturally diverse country and leaders would ordinarily want to achieve consensus when making decisions. Moreover, since expatriate labour contributes to the development of the UAE economy, Syed & Özbilgin 2010) say the leaders believe the participative and democratic leadership style would improve employee productivity. Despite the focus on improving Organizational productivity, many researchers who have investigated leadership styles in the UAE say the best leadership and management styles are those that seek to build and influence lasting relationships (Baumüller 2007). Northouse (2010) says most Arab leaders strive to build and maintain these lasting relationships because if they are broken, it is very difficult to mend them

Many researchers have said that although the participative and democratic leadership styles appear to be the best leadership styles, the choice of leadership is mainly subject to the UAE Organizational context. A different group of researchers believes UAE leaders should not abandon their leadership styles for western-styled leadership styles. Instead, they suggest that UAE leaders should adopt multifaceted leadership styles, depending on their Organizational contexts. This view contradicts the commonly held belief that most UAE leaders adopt one leadership style. According to Nwagbara (2010), it is often rare to find managers relying on only one leadership style.

Since studies to investigate factors that affect leadership styles are dynamic, it is not surprising to see leaders adopt different styles. The diversity of leadership styles mainly stems from the different circumstances that force leaders to adopt different styles of leadership. Tannenbaum & Schmidt (1958) say the three common factors that prompt leaders to adopt different leadership styles include the characteristics of the leader, attitudes of the subordinates, and the attitudes of Organizational stakeholders in the UAE. Through the same scope of analysis, Randeree & Chaudhry (2007) say UAE leaders adopt different leadership styles because of their level in the authority hierarchy, function of the Organizational unit, the size of the Organizational unit, task characteristics and technology, lateral interdependence, crisis situation, stages in the Organization lifecycle and, finally, subordinates competence and performance (p. 222). Relative to the above views, Herbert (1981) believes that the choice of leadership is a function of several factors including the need to participate, level of commitment, and the importance of supervision in affecting the outcome of Organizational tasks.

Comprehensively, varied factors affect the best working practices of leadership in the UAE. Here, it is crucial to say several factors including, the context of the Organization, the characteristics of the Organization, the nature of the decisions and the attributes and preferences of the decision makers (Randeree & Chaudhry 2007, p. 222) affect leadership styles in UAE Organizations. The nature of Organizational objectives also significantly affects the choice of leadership in the Organization because the relative sense of difficulty, or ease, of completing Organizational tasks also affects the choice of leadership style in an Organization. Indeed, UAE leaders do not operate in a vacuum; they have to consider their cultural and Organizational contexts while choosing the best leadership style that they are comfortable with, and that fits the context of their decision-making environments. This analysis shows that the spheres of influence of UAE leaders within the private and public sectors therefore dictate their leadership styles because they denote different Organizational contexts of operation.

Management Styles Adopted By UAE Government Leaders and Private Organizations

Organizational contexts have a profound impact on the leadership styles adopted by UAE leaders. The private and public sectors offer unique characteristics that define the appropriateness of the leadership styles that the leaders should adopt. A high power distance, high uncertainty avoidance, and individualism are only a few characteristics of the UAE public sector that define the appropriateness of leadership styles in this sector.

Public Sector

High Power Distance Models

Syed & Özbilgin (2010) says one unique dimension of public sector leaders in the UAE is their selective application of high power distance models of leadership and management. The high power distance presents a situation where there is a limited upward mobility of personnel because of the existence of a caste or tribal system of association. In part, the existence of such a system creates a situation where there are very high inequalities of power and wealth within the UAE public sector. Most leaders in the UAE public sector therefore have a very profound presence of power within the Organization and their decisions are often unquestioned by their subordinates. This leadership structure creates a situation where leaders and their subordinates are incoherent (Management Paradise 2011).

High Uncertainty Avoidance

Another unique aspect of leadership and management styles in the UAE public sector is the presence of high uncertainty avoidance levels among most UAE leaders. The high uncertainty avoidance informs why there is a relatively strong presence of bureaucracy within the UAE public sector (McAdam & Keogh 2013). Strict rules, policies, and procedures are partly responsible for these bureaucracies. Public sector managers also exhibit a very low tolerance to uncertainty within the Organization (Crawford 2004). The high uncertainty avoidance level has very significant limitations for the competitiveness of the public sector because it limits innovation and creativity. Similarly, the high uncertainty avoidance in the Organization limits new learning within the public sector.

Randeree & Chaudhry (2007) posit that a close leadership dynamic that describes the attitude of most public sector managers in the UAE is a high depiction of masculinity in their leadership and managerial styles. In line with the high uncertainty avoidance trait, most UAE public sector managers rely on traditional power structures to govern because they give them a lot of freedom to be assertive in the Organization. Unfortunately, through the exercise of these traditional power structures, most public sector managers in the UAE tend to be insensitive and uncaring (Crawford 2004).

Individualism

The leadership styles adopted by public sector managers in the UAE also show a low level of individualism. This is because most managers and leaders within this sector pledge their allegiance to the ruling family and therefore show no willingness to exercise personal preferences in their leadership styles (McAdam & Keogh 2013). Through the influence of Arab cultural norms in their leadership and management styles, it is inevitable to say that most Arab cultural practices do not fit well with key tenets of western-styled leadership practices. For example, McAdam & Keogh (2013) says open communication and employee inclusivity (in the decision-making process) does not augur well with the Arab culture.

Private Sector

Unlike the UAE public sector, the private sector adopts many leadership styles. Peterson & Seligman (2004) say it is difficult to isolate one leadership style that prevails in the UAE private sector. Indeed, because powerful families mainly lead most UAE private sector firms, the choice of leadership styles remains a preserve of family members. However, based on a general assessment of most private sector firms, many private sector managers adopt the consultative leadership approach (Varadarajan & Majumdar 2012). Some private sector managers also adopt the democratic leadership styles. An even smaller percentage of managers adopt the participative leadership style (Index-Mundi 2013). Through the adoption of these leadership styles, consultation, and democracy emerge as the main characteristics of the UAE private sector leadership styles.

Consultative

Since most UAE private sector managers adopt the consultative leadership style, Naciri (2008) says it is a common business practice for many managers in the UAE to consult with their peers. Indeed, in a country where multimillion-dollar deals occur in coffee shops and private meetings, many UAE managers prefer to adopt leadership and management styles that emerge from consultations with family members and other people of influence (Naciri 2008). From this assessment, it is common to see many private sector leaders engaging with a close circle of people when they have to make strategic business decisions in the Organization. This leadership structure closely resembles the top-down management structure where selected groups of employees have the privilege of interacting with top-level managers to formulate strategic decisions for their Organizations (Wang & Chich-Jen 2010). In this context, the role of lower-level employees is to receive the direction from top-level managers on how to implement the decisions that have emerged from such meetings.

Democracy

Although the consultative leadership style is prevalent in most private sector Organizations, some private companies in the UAE prefer to adopt western-styled leadership styles where leaders and managers make decisions democratically (Arabian Business 2013). In such Organizations, lower-level employees have a wider space (compared to public sector Organizations) of contributing to the decision-making process of the Organization. Companies that have firmly embraced such leadership styles prefer to seek the services of management professionals and consultancy firms in making their decisions. The number of firms that adopt this management style is however small.

Comprehensively, it is inevitable to point out that private sector Organizations and public sector Organizations have different characteristics that affect their leadership styles. However, these unique characteristics introduce the need for understanding the appropriate leadership styles that would work in both sectors.

Appropriate Leadership Styles for Government and Private Organizations in the UAE

As described in this paper, the UAE public and private sectors are distinct from each other in terms of their leadership and managerial approaches. Both sectors of the UAE economy abide by different Organizational performance standards and management acumen. However, perhaps, the most significant distinction between both types of Organizations is their difference in purpose. Stated differently, public sector Organizations strive to improve the welfare of the public through the provision of goods and services, but the private sector aims to improve the welfare of its shareholders (owners). There has been a bold attempt by researchers to associate UAE leadership styles as part of the wider leadership practice adopted in the Middle East.

For example, Derel (2003) conducted a review to evaluate the leadership styles adopted by private and public institutions in the Middle East by focusing on evaluating the leadership styles for school principals from public and private schools in Turkey. He evaluated the leadership styles of its principals after visiting 117 public and private schools and evaluating the views of a similar number of respondents (teachers) from the same schools (one criterion for choosing the respondents was their work experience with their leaders) (Derel 2003). After the teachers completed a leadership behaviour description questionnaire (LBDQ), the researcher found out that the differences in leadership styles for both public and private institutions were insignificant. However, the researcher also found out that private school principals had a strong tendency of initiating structure dimension in their leadership styles (Derel 2003). He also found insignificant differences in mean consideration dimensions between the private and public school leaders.

Iqbal (2011) disagrees with the view that there are insignificant differences between public and private leadership styles in the UAE. He especially emphasises the differences in leadership styles between the UAE private and public sectors by saying that although the public sector is reforming, leaders in the private sector are more receptive to change, as opposed to leaders in the public sector. This finding mirrors other studies done in Jordan, where Iqbal (2011) found out that, private sector leaders showed a strong inclination to adopting the initiating structure, while public sector managers showed a strong inclination to the consideration leadership structure. The study also showed that most private sector employees had a good working relationship with their leaders because they spent more time with them (Derel 2003).

A different study conducted by McAdam & Keogh (2013) to establish the perception of public sector employees towards the leadership styles of their leaders showed that there was a direct relationship between the supervisory skills of the leaders and the level of expectations of the employees. The researchers also affirmed the same relationship with the leaders leadership skills (McAdam & Keogh 2013). In both analyses, the researchers found out that the expectation levels of the employees were higher than their perception levels (to come up with these findings, the researchers used the cluster sampling technique). (McAdam & Keogh 2013).

The above studies show that the leadership styles adopted by private sector managers cultivate a positive relationship with employees, while public sector managers experience unreceptive attention of their employees because they exercise rigid leadership styles. The adoption of the initiating structure in most UAE private sector Organizations largely explains this situation. Based on the similarities between UAE leadership styles and Middle Eastern leadership styles, it is important to point out that UAE leadership styles largely mirror Middle East leadership styles. However, a deeper analysis of these intrigues highlights the importance of individual awareness to higher management levels because it explains employee perceptions and attitudes towards leadership styles. The effect also happens in the opposite way because individual awareness of leadership styles also affects a leaders attitude about governance.

Importance of Individual Awareness of Higher Management Levels

Many researchers have written about the effect of leadership and management styles on Organizational performance (Iqbal 2011; Varadarajan & Majumdar 2012). Regardless of the contents of their narratives, there is a consensus among many analysts that depicts the existence of trade-offs in the adoption of leadership and management styles. Through this analogy, it is correct to say that the choice of leadership styles and managerial approach is a critical component for the success of most Organizations (Halldorsson 2007). Leadership styles, by virtue of their contribution to Organizational success, symbolise a special component of leadership as a discipline. However, the understanding of leadership as a discipline hinges on the understanding of individual awareness to higher management levels. This section of the paper explores past studies that explain the concept of individual awareness to higher management levels. The contributions of the vertical dyad exchange model and the path-goal theory emerge here to identifying how individual awareness affects leadership and management approaches.

The vertical dyad exchange model suggests that leadership is inconsistent (Lee 2005). It also proposes that individual awareness affects the leadership styles, based on the characteristics of the subjects. For example, Lee (2005) says, while a leader may be sympathetic towards one employee, he may be aggressive and inconsiderate towards another employee. Therefore, the vertical dyad exchange model proposes the importance of understanding if an employee is in or out with a leader (Watkins 2008). An employees competency level has a huge role to play in determining his/her chances of gaining favour with the leader. Usually, most employees who are in with the leaders share the same beliefs, values, and attitudes of the leader, while those that are out do not share similar characteristics with the leader. Therefore, employees who are in with a leader have a high likelihood of forming a good team with the leader, while those that are out have a very low likelihood of joining this team (Derel 2003).

The acceptability of a leaders management style mainly stems from the principles of path-goal theory. This theory stipulates that leadership and management styles are only acceptable when they promote employee satisfaction. The same theory also stipulates that leadership and management styles are motivational (only) when they eliminate all the barriers to goal accomplishment (Fairholm & Fairholm 2009). The founder of the path-goal theory says leaders have to adhere to the right leadership strategies if they want to accomplish challenging Organizational tasks (Lee 2005). Unlike researchers who believe leaders exhibit one leadership style, only, the path-goal theory suggests that most leaders may exhibit different leadership styles, at the same time.

Researchers from the University of Michigan have redefined the concept of leadership by saying it is not a mechanical approach to running Organizations, but rather, a humanistic approach of the same (Hesselbein 2004). This humanistic appeal of leadership underscores the importance of individual awareness in leadership. Researchers who hold this opinion also say task direction and socioeconomic supports are among key tenets that define the relationship between leaders and their followers (Lussier & Achua 2009). The same researchers show the existence of two types of leadership production-oriented leadership and employee-oriented leadership (Fagenson-Eland & Baugh 2005; Randeree & Chaudhry 2007).

The main difference between these types of leadership approaches is the focus on the leaders. Leaders who value the technical aspects of a job ordinarily pursue production-oriented leadership styles, while leaders who are motivated to include employees in their decision-making processes, and provide a supportive environment for employees to work, pursue employee-oriented leadership (Elenkov 2002). Lussier (2009) says leaders who demonstrate an individual awareness in leadership are those that develop primary and secondary relationships within the Organization. Primary relationships are distinct from secondary relationships because they are personal (face-to-face), while secondary interactions refer to work-oriented relationships (such as the merger between different operating departm

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