5

Culture and Leadership in Austria

Erna Szabo
Gerhard Reber
Department of International Management,
Johannes Kepler University,
Altenberger Strasse 69, A-4040 Linz, Austria

1.  SOCIETY AND CULTURE IN AUSTRIA

Introduction

Based on several extensive image studies in 30 countries, Schweiger (1992) presented Austria's image in the world: Austria is considered the country of classical music and world famous for the Viennese Waltz. In response to the question “Which famous Austrians do you know?” most respondents (above 20% in all countries, 75% in the United States) named the composer Wolfgang Amadeus Mozart (1756–1791), followed by Johann Strauß, Senior (1804–1849) and Johann Strauß, Junior (1825–1899). Historical and contemporary political leaders, business leaders, and famous Austrian scientists fell far short.¹

Indeed, Austria is famous as the land of music and a tourist attraction with its Vienna Boys’ Choir (founded in 1498 by Emperor Maximilian I), the Vienna Philharmonic Orchestra, and the Vienna State Opera. Yet is Austria just a pure country of culture, in the sense of art and literature? What about the second aspect of culture originating from anthropology, that is, the shared way people in a society feel, think, and behave? Who knows which forces have shaped Austrian societal culture, which practices and principles make Austrian organizations work, and which leadership styles are accepted and preferred among Austrians? The following chapter sheds light on these issues. We start with a brief summary of Austria's history and its contemporary economic and social structure (Appendix A gives basic information on Austria) and then report findings of the GLOBE project related to societal culture and business leadership in Austria.

Historical and Political Developments

Settlements in the Alpine region and the fertile plains of the Danube date back to prehistoric times: The Celts prospered from the rich mineral resources (most notably salt and iron); the Romans conquered the region around the birth of Christ; up to the late 8th century waves of migrating peoples, among them Germanic tribes, Huns, and Slavs, repeatedly crossed the land; toward the end of the 10th century Charlemagne established the Carolingian Mark in the area of present-day Austria.

From the 10th century onward, Austria's history was dominated by two dynasties: the Babenbergs, who died out in the middle of the 13th century, and the Habsburgs, who originated from Switzerland. The Habsburgs were very successful in enlarging their territories, for example, by strategic marriages. At the beginning of the 16th century, the dynasty split into a Spanish and an Austrian line and the Austrian Habsburgs added Bohemia and Hungary to their empire. Throughout the 16th and 17th centuries, the dominant theme of Austrian history was confrontation with the Ottoman Empire, whose vast armies twice laid siege to Vienna.² After these threats were over, Austria acquired new territories and emerged as a major European power. Its lands, which were inhabited by a rich body of different peoples, extended from the Netherlands to the West to Sicily in the South and to Poland in the East. Austria in this period covered a region that largely overlapped with today's European Union (EU), but without the British and Irish Isles and Scandinavia. Conquests in Central America under Karl V led to the notation of the empire in which “the sun never sets.” In the second half of the 18th century, Empress Maria Theresia and her son Joseph II implemented massive programs of reform, laying the foundations for a modern state administration. The General School Regulations decreed by the Empress in 1774 laid the cornerstone for Austria's education system; mandatory school attendance for children starting from the age of 6 years was introduced.

In the 19th century, Austria suffered a succession of defeats against other European powers; at the same time the Habsburg administration was forced to make concessions to both the rapidly growing nationalist and democratic movements. In 1867, Emperor Franz Joseph I acceded to demands for the creation of the Double Monarchy of Austria-Hungary. Meanwhile, Germany was founded after Prussia won a military victory over France. Austria, that is, the House of Habsburg, was excluded from this new construction of a “Little German Solution” and remained a nation of many peoples (Vielvölkerstaat) with increasing nationalist conflicts, which finally led to the beginning of World War I (1914–1918). The war had started as an internal Austrian issue, triggered by the assassination of the successor to the throne by a Serbian nationalist.³ The main rivals in the war were Austria and Germany on one side and the “Triple Entente” (Great Britain, France, and Russia) on the other side. After the victory of the Entente and the end of the war, the Habsburg empire was dissolved under the Versailles Treaty and Austria was proclaimed a republic in 1918.

The so-called First Republic provided the foundation for today's democracy. However, in 1933 unstable economic and political conditions led to the imposition of a dictatorship under Engelbert Dollfuss, whereas civil war in 1934 resulted in suppression of the Social Democratic Party and Dollfuss's assassination by National Socialists.⁴ Hitler “invaded” Austria in March 1938 and formally incorporated its territory into the German Reich. Hitler was welcomed by a large part of the Austrian population. However, historians have been debating since whether the invasion was a hostile annexation by Nazi Germany or a voluntary joining (Anschluß) by the Austrians.

What followed was World War II and Austria's probably darkest period in history, including the Holocaust with the murder of 66,000 Austrian Jews. Even today, this period of Austrian history has not been completely overcome and “healed up.” In particular, Austrian citizens’ active role in the holocaust still leads to defensive reactions among parts of the population. Decades after the fact, some Austrians still view Austria as the first victim of Adolf Hitler and have therefore, compared to Germany, never really accepted the culpability or responsibility of their country.

In 1945, after the victory of the Allied Powers (Britain, France, the Soviet Union, and the United States) over Nazi Germany, Austria was revived as a republic (the so-called Second Republic) but remained occupied by the Allied armies for another 10 years. The economy was stimulated with international help; in particular the Marshall Plan⁵ enabled a successful recovery.

In 1955, the Austrian State Treaty was signed, reestablishing Austria as a sovereign nation. In accordance with the treaty, Austria became a permanently neutral state after adopting a law in parliament that ruled out military bases on Austrian soil and the accession to any military alliance. Austria followed a policy of active neutrality and joined the United Nations (Sully, 1995b, p. 67). The Austrian capital, Vienna, became one of the permanent seats of the UN (United Nations), hosting the IAEA (International Atomic Energy Agency), the UNIDO (United Nations Industrial Development Organization), and several UN departments. Vienna was also selected to host the OSCE (Organization for Security and Cooperation in Europe) and OPEC (Organization of Petroleum Exporting Countries). Vienna has frequently been chosen as the venue of key superpower summit meetings and of other important international negotiations. For many years now Austria has made an active contribution to the United Nations’ peace-keeping missions.

Coalition governments between the Social Democrats and the People's Party endured under a succession of chancellors until 1966, when the People's Party won a legislative majority and organized a single-party government. In 1970, the Social Democrats came to power as a minority government under Bruno Kreisky. Subsequent elections in 1971, 1975, and 1979 yielded majority mandates for Chancellor Kreisky. International negotiations, for example, between Israel and the Palestine Liberation Organization (PLO), took place in Austria and social reforms were undertaken. Their focus was on full employment rather than budgetary consolidation: “If you were to ask me how I feel about public debt, I would say over and over that a couple billion Schillings of public debt causes me fewer sleepless nights than to think of the hundred thousands of unemployed” (Bruno Kreisky, quoted on Austrian television, 1990).

The 1980s were again characterized by coalition governments between the Social Democrats and the People's Party. The election of October 1994, however, radically altered the parameters of the postwar system. For the first time since 1945, the two main parties failed to secure a two-thirds majority of the seats in Parliament; the old two-party system gave way to a pentagonal model: Overall five parties secured parliamentary seats (Sully, 1995a, p. 219), among them the Green Party and the Freedom Party (FPÖ), whose chairman at that time Jörg Haider is by some considered a mere populist, by others a far-right nationalist (Banks, Day, & Muller, 1997).

After the 1999 election, the Freedom Party became even stronger and was able to form a coalition government with the People's Party. This constellation led to criticism and protests nationally and internationally and the EU imposed sanctions on Austria. In an EU report covering the new Austrian government's commitment to the common European values and the evolution of the political nature of the FPÖ, Ahtisaari, Frowein, and Oreja (2000, p. 27) state:

It is ironic that at the formal level Austria had become a less “corporate state” (see the section on social partnership later), and thus had moved closer to other European democracies’ political realities. The irony is that the move obviously needed a party that leaves doubts as to their own democratic principles.

After 1999, local and provincial elections saw continuous losses for the Freedom Party. It became obvious that a large number of Austrians had been in favor of strengthening the Freedom Party as a form of protest against the old party system, yet they did not approve the new political course in similarly large numbers as the federal election would have suggested. What followed were better fights and intrigues within the Freedom Party, which finally led to the breakup of the coalition government. The following elections saw the Freedom Party reduced to one third and fewer of the votes the party had managed to secure in 1999.

In summary, Austria has, over time, moved from a world power to a small country, from a monarchy to a democratic republic. In this sense, Austria might be considered a social construction rather than an entity and has a background that concerns issues and territories that are no longer part of the modern state: “Austria as an entity that spans centuries, religions, classes, dynasties, regions, and ethnic groups is an invention naturally: a ‘Kopfgeburt’ (a figment of your imagination), projected from the present to the past, with sites set on the future. Of course, in this respect Austria is no different from France or Portugal or the Netherlands or Switzerland. All ‘nations’ are political inventions” (Pelinka, 1995, p. 8).

On a humorous note, Austrian-born Paul Watzlawick concluded that Austria's history has brought about very special people:

We conclude this excursion into history with a recapitulation of the leaders who have most significantly shaped the history and development of Austria:

• Various emperors of the Habsburg dynasty: The most popular ones were Maria Theresia, the first woman to the throne, her son and successor Joseph II, and Franz Joseph I, a well-liked father figure.⁶

• Adolf Hitler: Born and raised in Austria,⁷ Hitler began in Germany to transform his ideas for the Third Reich into deeds. Later, his charisma had a similar effect on Austrians as it had on the Germans; disillusioned by the political and economic situation, the Austrian population was more than ready to accept his promises for a reconstruction of the Austrian economy. Hitler also successfully constructed images of national pride and power that were based on the institutionalization of schemes of racism and anti-Semitism in public culture and political action.

• The first generation of politicians in the Second Republic: Among them were survivors of the concentration camps as well as returning emigrants, described as possessing honesty and integrity rather than political expertise. Across political party lines they were united in the conviction that social unrest based on economic inequality (which had enabled Hitler's success in Austria) had to be avoided in the future, and that cooperation in economic matters was an effective means to grant stability.

• Bruno Kreisky: Of Jewish descent, Kreisky was a young member of the Socialist Party when the Second Republic was established. He is described as a strong-willed person acting on socialist ideology. He was federal chancellor from 1970 to 1983, built the Austrian welfare state, shaped the European Social Democratic landscape together with Willy Brandt in Germany and Olaf Palme in Sweden,⁸ and was internationally highly respected for his mediation in peace negotiations, in particular in the Middle East.

The Current Economic and Societal Situation

The Economy

The primary sector (agriculture) accounts for 1.8% of Austria's gross domestic product, whereas the secondary sector (industry) makes up 30.4%, and the tertiary sector (services) accounts for 67.8% (2004 estimate; World Factbook, 2006). Austria has a per capita GDP of about U.S.$32,500 (2005 estimate; World Factbook, 2006) and ranks 14th place on the human development index⁹ (Human Development Report, 2006).

Austria draws on the following resources: timber, few metals and minerals, salt, a dense river network serving as the base for hydroelectric power¹⁰ and mass transportation, and the beauty of the different Austrian regions. Altogether this is a rather poor basis, making Austria heavily dependent on foreign trade. Education and the quality of the workforce are Austria's most valuable assets. For instance the LD process,¹¹ invented in Austria, has dominated steel production around the world. Two thirds of the steel production worldwide (about 800 million tons per year) are based on the LD process.

During World War II, the Nazis had taken over all industry of significant size. In 1946, this former Third Reich industry became state owned to avoid a transfer of assets to the Soviet Union (Dana, 1992, p. 127). Most of these firms remained in the ownership of the state until the beginning of the 1990s, when privatization programs were started. Recent trends have included deregulation and privatization of many sectors, such as that of major industries, including steel, oil, chemicals, as well as the railroads and major banks.

One of the areas in the tertiary sector that reports especially high rates of foreign-currency earnings is tourism. In contrast to countries where hotels tend to be large and parts of chains (e.g., Holiday Inn, Hilton), most of Austria's thousands of hotels are family owned and operated, in some cases for decades or even centuries; for instance, the Ortner family has owned the Hotel Weisses Kreuz in Innsbruck since 1465 (Dana, 1992, p. 129).

As in tourism, the predominant feature of Austria's overall economy is its high proportion of small and medium-size enterprises. Most firms are traditional small businesses that employ a substantial portion of the population: 97% of Austrian businesses have fewer than 50 employees; 46% of the labor force works for such firms. Most small firms are unincorporated sole proprietorships (Dana, 1992, p. 126). Other countries’ governments have encouraged mergers of existing firms into larger units; in contrast, Austrian business did not go through a “big is better” stage. Only in the wake of EU membership have mergers taken place in some sectors, for example, the financial sector.

Austria and Neighboring Germany. The two countries are characterized by populations of predominantly Germanic origin, sharing a common language. Thus, it is not surprising that the Austrian economy is closely tied to its German neighbor. This link goes back to the time between the two world wars, when Germany's economic influence on impoverished Austria grew substantially; by the 1930s, commercial law in Austria and Germany had become almost identical. The close ties to the German market economy remain today and facilitate business transactions between the two countries. To eliminate foreign exchange risk, to facilitate trade and to support the small-business sector, the Austrian government ensured that the Austrian schilling had a stable exchange rate with the German mark (Dana, 1992, pp. 127–128) long before the euro was introduced as the common currency. Germany's leading export to Austria is the automobile, essential parts of which are manufactured in Austria, for example, the Diesel engines for the BMW models. Germany's main contribution to Austria's economy is in tourism.¹²

The Fall of the Iron Curtain. With the collapse of Eastern European communism in 1989, Austria was favorably positioned to regain its role as an economic power in the region. During 1990 alone, exports to Czechoslovakia increased by 72%. In addition, Austrian exports to Hungary, Poland, and Czechoslovakia more than doubled during the first 3 years after the fall of the Iron Curtain (Smith, 1992, p. 108). In the years immediately following the opening of the borders, some 40% of all direct foreign investments in the former communist countries came from Austria (Bundeskanzleramt, 1996). Austrian businesses began taking advantage of cheaper labor (e.g., in Austria the average monthly salary was about seven times higher than the equivalent in Hungary); many manufacturers shifted their production sites across the borders. Vienna's proximity to the Central and Eastern European markets also meant that many international firms began to use the city as a base from which to coordinate Central and Eastern European operations (C. Smith, 1992, p. 108).

Austria in the European Union. Austria joined the EU in 1995 after a national referendum had produced a solid positive result of 66.6% “Yes” votes. From the start the “Yes” campaign had significant advantages: It was better organized and financed, the two coalition parties were at leadership level for membership, and the social partners (see next subsection) were also in favor (Fitzmaurice, 1995). Although Austria trades with some 150 countries, the countries of the EU account for about two thirds of foreign trade, which made the step to join the union even more reasonable. The transition has not been a completely smooth one, however: Hundreds of laws have had to be changed, protection of industries had to be given up, concessions to lower environmental standards had to be made, and dealing with the EU bureaucracy had to be learned.

Social Partnership and Codetermination

Consensus politics has been one of the hallmarks of postwar Austrian life, its predominant manifestation being the social partnership model. This model was created after World War II, mainly as a result of a lack of confidence in the political extremes on the capitalism/socialism continuum (Child, 1981). The model substantially contributed to the social peace that was essential for the reconstruction of Austria after the destruction of the war and Austria's subsequent development into a modern industrialized country (Bundeskammer für Arbeiter und Angestellte, 1996, p. 5). Specific contingencies supported the success of the model: the distribution of economic and political power among the two camps of the Social Democrats and the Conservatives, the smallness of the economy, and the high percentage of state ownership (Nowotny, 1991).

The social partnership model is a system of economic and social cooperation at the national level between the representatives of employers (Chamber of Commerce), employees (Chamber of Labor), farmers (Chamber of Agriculture), unions, and government. This cooperation is at the top level (“Parity Commission”) based on the principle of voluntarism and carried out in an informal way. The general idea of the system is that the basic aims of economic and social policy are recognized by all partners and can be better realized through cooperation and coordinated action rather than through confrontational means such as strikes or lockouts. Social partnership is not a means of denying conflicts of interests; it is a model that aims at mutual problem solving and balancing interests through achieving mutual strategies and through its readiness to compromise and find consensus (Bundeskammer für Arbeiter und Angestellte, 1996, p. 7).

This form of partnership could not function unless the sections of the working population concerned belong virtually en bloc to their representative organizations (Bundeskanzleramt, 1996). Membership to the Chambers of Commerce, Labor, and Agriculture is obligatory (in 1996 the members of the different chambers voted in large numbers for a retention of obligatory membership), whereas trade union membership is voluntary (about 43% of the workforce were union members in 1999; Österreichischer Gewerkschaftsbund, 2001). Austrian unions are closely linked to political parties and are influenced by social ideologies, including Catholic and socialist ones (Tannenbaum, Kavcic, Rosner, Vianello, & Wieser, 1974). The centralization of the Austrian political system together with the cooperation with the (also) centralized social partners fits Crispo's (1978) term of a “corporate state.”

Ever since Austria became a member of the EU, the role of the social partnership has been continually changing because some responsibilities/decisions that were at the discretion of Austria and its social partners before are now handled at EU level. Also, since the federal election in 1999 (see the earlier discussion on political development) the role of the social partners is being further debated, in particular originating from the Freedom Party. However, despite these attempts to keep the social partners at distance, or even eliminate them from decision-making processes, we can state that the ideas of the social partnership model are still very much anchored in the Austrian system. In addition, nothing has changed in terms of arrangements concerning codetermination and works councils (see the following).

As in Germany, Luxembourg, Denmark, Norway, and Sweden, legally mandated codetermination is in place within Austrian organizations. The Austrian form of codetermination in large enterprises takes the form of two-tiered management structures: Workers’ representatives sit on the supervisory board, which sets corporate politics, approves major investments, mergers, expansion and plant closures, and also appoints members to a management board, which actually manages the enterprise (Hammer, 1996, p. 1923).

Works councils in Austria are given three kinds of rights: the right to information, the right of consultation in economic and financial matters, and the right of consent in social and personnel affairs. Works council members are elected by the workers; in practice, they often have close union ties (Hammer, 1996, p. 1923).

Codetermination and works councils are the logical consequences of the social partnership idea at the national level as it filters down into the individual organization. However, recent developments (e.g., the transfer of operations across the border to decrease labor costs) also show that the stable foundation on which employer–employee relations were built so far might have already developed its first cracks. In the wake of increasing competition, purely economic interests are sometimes given higher priority than long-term social partnership ideas. However, such changes are not restricted to Austria. The following quote regarding management in Europe confirms this opinion:

2.  METHODOLOGY OF GLOBE RESEARCH IN AUSTRIA

The GLOBE research in Austria consisted of questionnaire-based data collection, focus groups, semistructured as well as ethnographic interviews, and a qualitative media analysis.

Only a triangulation of different data (Webb, Campbell, Schwartz, & Sechrest, 1966), quantitative as well as qualitative, allows for the interpretation of holistic concepts such as culture and leadership. This strategy has been at the core of the GLOBE project from the beginning (House et al., 1999). In this sense, the Austrian research team applied specific ethnographic principles, in particular bringing in various types of data, collecting and analyzing these data in several rounds, and gradually narrowing the focus (Agar, 1996). This strategy assured that patterns in the data could be found, frames could be built, and an Austria-specific model of leadership could be generated.

Questionnaires

The questionnaire-based data included the three standard GLOBE Phase II questionnaires for the three levels under study: societal culture (“As Is” and “Should Be” items), organizational practices (“As Is” and “Should Be” items), and leadership attributes. We report the findings of the societal culture and leadership attributes questionnaires in this chapter.

A total of 169 Austrian middle managers completed the questionnaires in 1995. Table 5.1 shows their demographic characteristics. All participants completed the leadership attributes questionnaire, whereas about half of the managers (N = 91) filled out Version A of the questionnaire including the organizational practices items, and the other half (N = 78) completed Version B containing the societal culture items. The managers were members of 18 organizations within the two industries financial services and food processing.

Focus Groups

In early 1994, we conducted two focus groups, one with managers and professionals, the other with part-time students. The managerial group consisted of six alumni (two women, four men) from Johannes Kepler University, three of whom also held an MBA degree from a North American university. They represented various industries and functional areas. The second focus group comprised of eight part-time students (one woman, seven men) studying business administration. These students worked in different fields; none of them reported any managerial experience. Participants of both groups were asked to complete preparatory assignments concerning their personal definition of leadership. The actual focus group discussions lasted about 2 hours each and focused on three themes as defined by the GLOBE team: the definition of management and leadership, the difference (if any) between these two concepts, and finally, examples of outstanding leadership.

Interviews

Semistructured interviews took place right at the start of the project in early 1994. Five interviewees (two women, three men), in managerial as well as nonmanagerial positions in different industries, were asked about their perception of management and leadership. The average duration of the interviews was about 40 minutes. The guiding questions covered the same three themes that were used in the focus groups.

Ethnographic interviews were conducted during a later phase of the project, namely in 1995. They were based on the Qualitative Research Manual prepared for the GLOBE researchers by the anthropologist Michael Agar. Based on the strategy of maximizing differences,¹³ five managers were asked to participate in the interviews. Table 5.2 shows their demographic characteristics. The duration of the interviews ranged from 45 minutes to 1.5 hours. Interview themes focused on the interviewees’ concepts of leadership in general as well as on stories of successful and unsuccessful leadership from their own experience. Four interview partners also described their industry. Furthermore, four of the participants agreed to participate in follow-up interviews (see the following discussion on validation process).

TABLE 5.3
Austrian Media Analysis Data

The five semi-structured interviews and the nine ethnographic interviews (five initial, four follow-up) were transcribed and the resulting texts were restructured into text segments covering one idea each. All interviews were first analyzed individually, before frame building was applied during the subsequent group analysis. The interview data were analyzed separately for person-specific characteristics (character traits and behavior), leader–follower relations (values and norms concerning the followers as well as leader–follower interactions), and organizational issues (the leader's role inside and outside the organization as well as organizational practices).

The interview data were validated in four ways:

Media Analysis

The media analysis covered material from the Austrian print media and consisted of three types of data: (a) articles related to the nine GLOBE societal culture dimensions, (b) articles concerning the two industries under study (financial services and food processing), and (c) articles referring to leaders and/or leadership.

Articles for inclusion in the media analysis were collected from six print media during one week in December 1996 (December 9–15) and one week in September 1997 (September 8–14). The data of the second week comprised the validation sample. Table 5.3 describes the selected media in more detail. The sampling strategy followed Michael Agar's guidelines for qualitative data analysis. Overall, 443 articles were selected (229 in the initial sample, 214 in the validation sample) and organized into 2,960 distinctive text segments. The analysis was conducted separately for the three types of data.

The media data were validated in the following ways:

3.  FINDINGS

We first present the findings concerning societal culture and then continue with the description of the leadership results. In each of these two subsections, the results of the questionnaire-based data collection are introduced followed by the findings of the qualitative part of the study (focus groups, interviews, and media analysis) whenever applicable. Results and conclusions from other research are brought in as well.

Societal Culture

The questionnaire-based results for the nine societal scales for Austria are displayed in Fig. 5.1 and Table 5.4. The “As Is” scales represent the perception of how the respondents view societal culture, whereas the “Should Be” scales indicate their values, that is, how the managers think their society ought to be. These two types of scales are not unrelated. For instance, the higher a person values gender equality, the more critical she or he will perceive actual gender equality practices, which might lead to lower scores on the “As Is” scale. Likewise, if a person perceives a dimension, for example, Power Distance, to be unsatisfactorily high, she or he will rate the “Should Be” dimension even lower. In other words, the person will value power egalitarianism even higher.

Where applicable, we compare our findings to Hofstede's (1980) results, although his data concerning Power Distance, Uncertainty Avoidance, Individualism, and Masculinity tap at a mixture of perceptions and values. In other words, Hofstede does not explicitly distinguish between “As Is” and “Should Be” scales. For instance, two of the three items used to calculate the Power Distance score are parallel items concerning the real-life (“As Is”) versus the ideal (“Should Be”) boss.

Figure 5.1 Societal Culture GLOBE Dimensions

For the description of the results, we grouped the nine GLOBE scales (cf. House et al., 2004) in accordance with Kluckhohn and Strodtbeck's (1961) classification of value orientations: time orientation (Future Orientation), human–environment orientation (Uncertainty Avoidance), relational orientation (Power Distance, Gender Egalitarianism, Humane Orientation, Institutional Collectivism, In-Group Collectivism), and activity orientation (Performance Orientation, Assertiveness).

Time Orientation

The scale Future Orientation (axis FUT in Fig. 5.1) shows that the Austrian middle managers reported a medium level of perceived Future Orientation (4.46), whereas they expressed a preference for higher scores on the value dimension (5.11). However, compared to other countries Austria is positioned high on the “As Is” scale (Band A, Rank 6), yet relatively low on the “Should Be” scale (Band C, Rank 50).

The Austrian media data parallel the quantitative findings: 9 out of 13 text segments relating to this dimension give accounts of initiatives that target an actual or planned increase of Future Orientation. An example is the foundation of an agency for innovation that specializes in helping start-up companies by providing funds for the market entry of innovative new products, by bringing together investors and entrepreneurs, and by offering assistance with the structuring of the new organization.

Human–Environment Orientation

Figure 5.1 shows a high level of Uncertainty Avoidance (axis UNC) for the “As Is” scale (5.16) and a considerable gap to the “Should Be” scale (3.66). In addition, Austria's position relative to the other GLOBE countries is in the top group for the “As Is” results (Band A, Rank 6). This finding corresponds with Hofstede's (1980, 1993) research that placed Austria in the upper third country cluster (Uncertainty Avoidance score of 70) among 53 countries and regions. Concerning the “Should Be” scale, Austria ranks very low (Band D, Rank 57), meaning that the middle managers in the Austrian sample indicate a preference for an increase in flexibility and risk taking.

A high level of Uncertainty Avoidance is usually reflected in the desire to control one's environment, in high levels of standardization, in regulations and laws even for specific details, and in bureaucracy. Drastic examples that exist in Austria are the bureaucratic hurdles entrepreneurs usually face during the start-up of a company, or the necessity of people visiting Austria, including tourists, to register with the police within 48 hours after entering the country. It is interesting that the findings for Uncertainty Avoidance seem to somehow contradict those for Future Orientation. Whereas on the one hand initiatives such as starting one's own business are encouraged (high Future Orientation), the actual process is then very formalized (high Uncertainty Avoidance). The Austrian media data reflect these general observations: 12 out of 26 text segments concerning Uncertainty Avoidance present a picture of a somewhat slow and complicated bureaucratic process, illustrated by the first and second of the following quotes. However, the media data also provide some examples of active appeals to change the current situation, as the third quote shows:

In addition to bureaucracy, manifestations of high Uncertainty Avoidance in Austria include for example:

• A comparison among the OECD (Organization for Economic Development and Cooperation) countries shows that the savings rate¹⁴ for Austria is 26.0, as compared to the United States at 14.4 or Japan at 34.6. Within Europe only the Swiss show a higher rate (33.0). A low-interest, low-risk savings account (Sparbuch) is the traditional and common way for many Austrians to invest their money. Only recently have other and more risky forms of investment, such as stocks, become more popular.

• There are explicit laws regulating the workplace. Examples include the Arbeitnehmerschutzgesetz (law regulating working conditions), the Arbeitszeitgesetz (law setting working hours), the Mutterschutzgesetz (law protecting mothers-to-be and nursing mothers), and Kollektivverträge (collective agreements) negotiated between employers and unions at industry level. In addition, the Unternehmensverfassung (governance structure) defines, based on the type of organization (private vs. public), whose interests have to be represented in the decision-making bodies (management and supervisory boards) and what the procedures have to look like. Also, the rights given to the works councils are stated explicitly, as mentioned earlier.

Relational Orientation

The dimensions Power Distance (axis POW), Gender Egalitarianism (axis GEN), Humane Orientation (axis HUM), Institutional Collectivism (axis CO1), and In-Group Collectivism (axis CO2), all concern social relations: among people at different levels in the social hierarchy; among women and men, the poor/disadvantaged, and groups. In general, the data suggest a strong preference for more democracy in society: Whereas the perception represented in the “As Is” scales is one of inequality, the “Should Be” scales show that power should be distributed more equally (“As Is” 4.95, “Should Be” 2.44), women given more opportunity (“As Is” 3.09, “Should Be” 4.83), and the poor/disadvantaged provided with better support (“As Is” 3.72, “Should Be” 5.76). Only the two collectivism scales show small gaps between “As Is” (Institutional Collectivism: 4.30, In-Group Collectivism: 4.85) and “Should Be” (Institutional Collectivism: 4.73, In-Group Collectivism: 5.27), both reflecting a slightly collectivistic rather than individualistic orientation.

A possible explanation for the wide gaps could be that political correctness and social desirability accounted for the results. Maybe the managers in our sample reported espoused rather than enacted values (cf. Argyris & Schön, 1978). In order to answer this question, we need to look at the dimensions in more detail and bring in additional findings from the qualitative part of the study.

Power Distance. Hofstede (1980) reported a Power Distance score of 11 for Austria (ranking Austria as the country with the lowest score overall). The GLOBE data give Austria a medium score on the “As Is” scale (Score 4.95, Band B, Rank 44), and place Austria in a low group for the “Should Be” scale (Score 2.44, Band D, Rank 48). When the “As Is” and “Should Be” scales are taken together, our findings do not contradict Hofstede's earlier results. Low Power Distance also goes along with Trompenaars's (1993) findings concerning the reason for having an organizational structure. Respondents in this multicountry study were offered two alternative explanations:

Austrian respondents opted for Option B by 94%, thus following a rational and coordinative logic of subordination, in contrast to looking at the organization as a legitimization for power differences.

However, the low level of Power Distance found in research is still puzzling Austrian scholars as well as Austrian students of cross-cultural management. Examples for and against the low level of Power Distance are usually produced without hesitation: On the one hand, participation in decision making is accepted and expected among Austrians; it is represented at the societal level in the social partnership model as well as at the organizational level through codetermination. On the other hand, Austrians are familiar with the importance of status symbols, in particular titles. Both participation in decision making and status symbols are believed to be indicators of a society's level of Power Distance, the former for a low level, the latter for a high level. How can such inconsistencies be explained? A possible explanation could be that societal changes take place over time and what we observe today might be artifacts of the past. During the monarchy ranks and titles were awarded by the Emperor. Those awarded a title most likely felt very proud and displayed the new title as an extended and audible symbol of the recognition given to them. Examples can still be found in the older parts of Austrian cemeteries, where titles such as “k.u.k. Hofbäckermeister”¹⁵ are listed on gravestones. Also, traditional store owners still display these titles in their logos. More than 80 years after the end of the monarchy, titles in recognition of seniority and status (Amtstitel, e.g., Hofrat) are still awarded in public institutions, to the amusement of other parts of the population (Corti, 1994, p. 135). However, times are changing. The younger generation, in particular, do not honor titles as much nowadays. Also, the majority of today's titles are no longer awarded, but achieved, especially in the form of academic degrees. Whereas with the older generation achieved titles are treated similarly to awarded ones, titles do not have the traditional connotations for the younger generation as they had earlier. In more general terms, a change might have taken place from status by ascription to status by achievement (Trompenaars, 1993); that is, it is today a person's own achievement that accounts for a high status rather than one's affiliation with a particular group.

Gender Egalitarianism. Austrian women account for 64.1% of the official labor force, mainly in sales, agriculture, and unskilled manufacturing. Whereas only 4.2% of all employed men work part-time, women constitute 28.8% (Bundespressedienst, 2000). Women have held about 10% of Federal Assembly seats in recent years, with more than twice as many serving in provincial government (Banks et al., 1997, p. 52). These numbers support the low level of Gender Egalitarianism found in the quantitative “As Is” data (Score 3.09, Band B, Rank 45). Similar to Power Distance, a wide gap exists between the “As Is” and the “Should Be” data (Score 4.83, Band A, Rank 18). The GLOBE “As Is” data show the same tendency as Hofstede's (1980, 1993) Masculinity scale, although less pronounced. This earlier research had placed Austria in the upper third country cluster (score of 79) among 53 countries and regions.

In recent years, gender-related topics have been hot issues on the public agenda. In 1997, a referendum¹⁶ was held for more rights for women (“Frauenvolksbegehren”). It was initiated by a committee of women, including politicians, artists, and journalists, who claimed the right for women to 50% of the public influence, power, and money. The referendum was successful: It received 645,000 votes. However, from today's (2006) perspective, it has to be said that despite the referendum's success, hardly any of its claims have been put into practice by supporting legislation.

Participant observation confirms that there is much talk about equal chances for women. However, practices often show a different picture. The following example illustrates this point. One of the few female Austrian university professors is quoted as saying at a conference on gender equality at Johannes Kepler University in 1997: “We've done a wonderful job in training our male colleagues. They have become experts on gender-neutral language. Unfortunately, their behavior has not changed a single centimeter.”

All data considered, one might assume that what our (predominantly male) respondents (N = 68) articulated in the questionnaires is likely to be espoused rather than enacted values. The female sample is too small to conduct a comparative empirical analysis, but a comparison of the mean scores gives a rough impression. The mean score of the 10 female respondents is 3.52 for the “As Is” scale (male sample: 3.02), and 5.40 for the “Should Be” scale (male sample: 4.74). Thus, although we might find some lip service on behalf of the male respondents, the female managers opt for even higher levels of gender equality.

Humane Orientation. This dimension shows similar patterns to Gender Egalitarianism, namely a medium level for the “As Is” scale (Score 3.72, Band C, Rank 46), and a very high one for the “Should Be” scale (5.76, Band: A, Rank: 4). Similar to Gender Egalitarianism, there is a lot of public and private discourse considering humane issues. A good example is the treatment of refugees. In the past, the official Austria as well as individual citizens often helped beyond the call of duty, for example, during the Hungarian crisis in 1956 (when 152,000 refugees came to Austria). The opening of the borders to the former communist neighboring countries and the civil war in the former Yugoslavia has recently brought refugees to Austria once again. This time, however, there is increasing resentment against the (temporary) newcomers, which goes along with changes in legislation that make it more difficult for refugees to attain political asylum.¹⁷

Espoused values concerning Humane Orientation are usually numerous in preelection times. The following quotes are taken from media reports on campaigns for provincial elections: “Fighting unemployment, homelessness, and poverty is our primary goal” (People's Party); “In addition to ecology, women and humanitarian issues are the main topics on our agenda” (Green Party); “No one should be discriminated against because of a disability” (Social Democratic Party). Thus, there are proclamations for Humane Orientation, yet enacted values often show the contrary. The media even provide a pattern of decreasing solidarity:

Collectivism. The two dimensions Institutional Collectivism and In-Group Collectivism show corresponding results. In both cases the “Should Be” scales (Institutional Collectivism 4.73, In-Group Collectivism 5.27) are slightly higher than the “As Is” scales (Institutional Collectivism 4.30, In-Group Collectivism 4.85). Hofstede (1980, 1993) also positioned Austria on the more collectivistic side of the individualism–collectivism continuum (score of 55).

Collectivistic societies are characterized by an economic system that is designed to maximize collective interests. The Austrian model of social partnership fits with this concept. Citizens of collectivistic societies also take pride in being members of their society and it matters to them that their country is viewed positively by people of other societies. Wodak et al. (1998) conducted an extensive discourse analysis concerning national identity. They located distinct national pride and patriotism in Austria: “Preferred objects of national pride are the Austrian landscape, political, social and ecological achievements, political security, cultural and scientific achievements, victories in sport, and national symbols like the anthem and the Austrian flag” (p. 345).

Traditionally, there have been long-lasting employer–employee relationships in Austria. It is not uncommon for someone to begin work for a company as an apprentice and then retire from the very same company. A curriculum vitae indicating a number of different employers is still looked on with suspicion. Unlike countries such as the United States where a change of workplace indicates flexibility, Austrians accentuate loyalty, although the situation is slowly beginning to change.

Moving from the workplace to the families, pride exists at this level, too. In a representative survey among the Austrian population,¹⁸ 60% of respondents stated that family and children are very important for them. A typical Austrian manifestation of family ties is the Sonntagsausflug: Parents and their children, frequently accompanied by grandparents or other family members, use Sundays to make an outing to the countryside, hike or go for a walk, and have lunch or dinner together. Adolescents often dislike this tradition, but it is a “must” in many Austrian families.

The fact that the “Should Be” scales are higher than the “As Is” scales, meaning more collectivism is preferred, is interesting: According to Triandis (1994), modern and complex societies become increasingly individualistic; Hofstede and Bond (1988) note that individualism follows economic success. Both factors apply for Austria, yet the trend at the individualism–collectivism dimension points to the opposite direction. What shows in our data might be the fear of loss of even more of the collectivistic values and therefore the respondents expressed heightened awareness to keep what is left.

Activity Orientation

The Austrian results show a high level of Performance Orientation (axis PER) at the “As Is” scale (Score 4.44, Band A, Rank 14) and an even higher level at the “Should Be” scale (Score 6.10, Band B, Rank 21). This comes as a surprise, because other studies (e.g., Trompenaars, 1993; Zander, 1997) do not report on similarly high levels of Performance Orientation for Austria. An indicator of a society's orientation to performance and achievement is entrepreneurship. We described earlier that some initiatives exist to support company start-ups, whereas bureaucracy clearly provides major barriers. Dana (1992, p. 126) concluded that although innovative entrepreneurship has occurred in Austria, for example, the invention of modern skis, one cannot describe the Austrian society as extremely entrepreneurial. Moreover, entrepreneurship is not as highly valued in Austria as in many other countries. One might add that conditions in Austria have indeed never been very favorable for entrepreneurs and inventors. What is commonly known as the österreichisches Erfinderschicksal (Austrian inventors’ fate) stands for the fact that in the past inventors were usually not given credit for their work while still alive; many of Austria's most remarkable inventors died in poverty.

However, recent developments in business organizations indicate a trend toward more Performance Orientation, in particular in the form of new incentive systems and performance-based pay structures. They are already common for Austrians working for multinational companies and are becoming increasingly popular in Austrian businesses as well.

Finally, the dimension Assertiveness (axis ASR) shows for Austria a relatively high score on the “As Is” scale (Score 4.62, Band A, Rank 6), yet a very low score on the “Should Be” scale (Score 2.81, Band C, Rank 60). Assertiveness was a part of Hofstede's (1980) Masculinity index, where Austria also ranked very high (score of 79). It is treated as a separate dimension by the GLOBE study. The low level of “Should Be” Assertiveness might hint at a possible trend toward a more egalitarian society, as was discussed in the section concerning relational orientation.

Leadership

A chapter on leadership and leaders in a German-speaking country would not be complete without a discussion on the translation of these two terms into German. The direct translation of the English word leader into German is Führer. It carries a heavy weight because it refers to Hitler and Nazi Germany. The word root “führ” is present in Austrian German but the noun Führer is cut out of the language, in particular when referring to an individual. Words including Führung (leadership), however, are frequently used, for example, Führungsstil (leadership style), Führungskultur (leadership culture), Führungsteam (managerial team); and so are words including Führer when referring to organizations, for example, Marktführer (market leader) or Branchenführer (industry leader).

The stigmatization of the term Führer opens a gap for alternative terms. The questions then are: (a) Which terms do people use when they talk about leaders, (b) do these terms bear the same or similar connotations as in English, and (c) is there a difference between the English manager and leader? An analysis of our two media samples provided the terms listed in the upper part of Table 5.5.

The media data might present a slightly distorted distribution of language use, because they mostly talk about top managers. Our interviewees, for instance, used the term Führungskraft much more frequently than the media analysis suggests. However, both data types suggest that the gap left by the stigmatization of the term Führer is filled with the two terms Manager and Führungskraft. Is there a difference in concept between a Manager and a Führungskraft? This question was asked to the focus group participants and the five managers with whom we conducted semistructured interviews. Their answers do not provide a clear picture: Some of the interviewees matched “task orientation” with the Manager and “leading people” with the Führungskraft; others considered the two terms to be synonymous. Among those to whom the terms differed there was no consensus as to whether an outstanding Führungskraft had to be a good Manager at the same time. Some considered Führungskraft the overarching concept, whereas others assumed that an outstanding Führungskraft did not necessarily have to be professionally competent at the same time. Some concluded that an outstanding Führungskraft is needed in exceptional situations only and a competent Manager is required to run daily operations (cf. Appendix B for the different definitions of outstanding leadership).

Similar translation difficulties as those found with leader occurred for the English term follower. The direct translation into German is Geführte, again, a word hardly ever used by the media or our interview partners. The term Mitarbeiter is the one word most frequently used; the media as well as the interview data suggest that this is the correct word to address followers in a business context. In the past, employees were frequently called Untergebene (subordinates), a term that is not common any more. The lower part of Table 5.5 shows the frequency of language use in the two media samples.

Questionnaire-Based Data Collection

Table 5.6 gives an overview of the six second-order leadership factors and their corresponding 21 first-order subscales. They are based on an overall 112 leadership items that were ranked by the middle managers in our sample (N = 169) on a scale between 1 (attribute greatly inhibits a person from being an outstanding leader) and 7 (attribute contributes greatly to a person being an outstanding leader). Data were collected in two industries, namely food processing and financial services. However, comparative analyses did not reveal any major differences in the managers’ responses (for a discussion of the industry-level results, see Brodbeck, Hanges, Dickson, Gupta, & Dorfman, 2004).

Among the contributing second-order leadership factors (Mean > 4.5) are Charismatic (6.02), Participative (6.00), Team Oriented (5.74) and Humane Leadership (4.93). These four factors include four facets of leadership, namely personality (e.g., integrity), cognitive skills (e.g., administratively competent), leadership style (e.g., participative), and concern for the team (e.g., team integrator). This suggests that the managers in the Austrian sample view leadership as a holistic concept, and do not, for instance, focus exclusively on personality or leadership behavior. Compared to many other countries in the GLOBE study, it is in particular the scale Participative leadership that stands out (Band A, Country Rank 3). These findings are in line with the relatively low power distance scores we found earlier in the discussion of societal culture, and also with the results of research based on the Vroom–Yetton (1973) model for managerial decision making.¹⁹ The model has recently been employed to compare leadership styles between seven European countries (Reber, Jago, Auer-Rizzi, & Szabo, 2000), between Polish, Austrian, and U.S. managers specifically (Maczynski, Jago, Reber, & Böhnisch, 1994), and of country samples over time (Reber & Jago, 1997). The studies consistently show Austria as very participative, similar to its neighbor countries Germany and Switzerland (Brodbeck et al., 2000; Szabo, Reber, Weibler, Brodbeck, & Wunderer, 2001), and significantly different from Finland, France, the Czech Republic, Poland, Turkey, and the United States.

Autonomous leadership is neither clearly contributing to nor clearly hindering from outstanding leadership (4.47). However, Austria ranks higher on this dimension than most other countries (Band A, Country Rank 6).

Self-protective leadership is the one clearly inhibiting second-order leadership factor (3.07). This holds true in absolute as well as relative terms (Band F, Country Rank 49). The five scales comprising self-protective leadership suggest consistency with the contributing factors mentioned previously: A self-centered person would not be open for participation but would rather act autocratically, and face saving would inhibit the open discussion of problems and conflicts that participative interactions require.

Media Analysis

Table 5.7 gives an overview of the most frequency occurring leadership categories in the two Austrian media samples. Most of the categories concern person-specific characteristics, whereas two categories relate to leader–follower relations, in most cases in the specific form of negotiations between employers and works councils. The categories give a hint as to the areas of media focus. Much is said about the leaders themselves and the role they play in the organization and the outer environment. However, little is said about how leaders actually relate to and interact with their followers on a daily basis.

Table 5.7 allows for a comparison between the media data and the questionnaire-based data. It ranks the frequency of categories retrieved from the media and the means of the corresponding leadership scales. The rankings show that the most frequently mentioned media categories are at the same time among the top seven leadership scales. It follows that what is considered highly contributing to outstanding leadership in the questionnaires also finds a high representation in the media.

Because the media texts concerned all types of leaders, we checked for possible differences between business and other types of leaders: Most findings were in accordance. The only major difference was that integrity was significantly more often mentioned in a political than a business context. Recent scandals in different political parties may explain the wish/request for more integrity as part of political leadership.

Interview Analysis

In contrast to the media data, the interview data provide more insights into the daily interactions between managers and their employees. Table 5.8 gives an overview of how the interviewees described the leader as a person: Descriptions of specific personality traits are rare. Rather, more general descriptions are the norm, ranging from the possession of integrity and personality (without going into more detail) to the necessity of the leader to serve as a role model and possess social competence. Another theme related to the individual concerns the managerial side of behavior, namely technical/factual competence as a prerequisite for success. However, there was no consensus among the interviewees whether this type of competence really contributed to a good leader. This finding parallels the initial description of the diffuse difference between Führungskraft and Manager.

The leader–follower relationship was what the interviewees talked about in great detail (compare Table 5.9). This may have to do with the format of the interviews, because we had asked for events of successful versus unsuccessful leadership.

The different categories tie into one another and include orientation to people as well as task orientation, with communication being the “vehicle” and trust and respect being the underlying prerequisites. Whereas decisions are preferably made as a team, the leader is expected to coordinate and supervise the work. It is interesting how well these results (derived from interviews with managers) fit with Zander's (1997)²⁰ profile of Austrian employees’ preferences regarding interpersonal leadership (derived from questionnaires):

4.  PATTERNS IN AUSTRIAN BUSINESS LEADERSHIP

In this section, we are going to integrate the findings from the different sources concerning leaders and leadership obtained so far: questionnaire-based data, media analysis, and interview data. To start with, if there were a prototypical type of Austrian business leader, what would such a person look like?

TABLE 5.9
Leader–Follower Relations in the Interviews

Characteristics of a Leader

Demographics. In terms of demographic characteristics, the person would most likely be male (as suggested by the findings concerning Gender Egalitarianism at the societal practices level) and of middle age (as suggested by the media and also reflected in our sample of middle managers itself), although both gender and age are contingent on the industry (the primary and secondary sectors are traditionally male dominated, whereas the services sector allows for better chances of women) and the level within the organizational hierarchy (the higher up in the ranks, the fewer women).

Education. As for education, this person's curriculum vitae would likely provide for a sound education and possibly a university degree. However, there is a shift in focus. According to media and interviews, continuing training is becoming increasingly important. But whereas until about 20 years ago the area of concentration was not extremely important (there are, e.g., many lawyers among Austrian business leaders) and Tannenbaum et al. (1974) concluded that “Austria lacks training facilities for managers,” the focus today is on business studies. A large number of public and private training programs supplement university education. Most management training occurs in the area of technical/factual competence, whereas less consideration is given to personality development and social competence. An analysis of course offerings for “more success in business” (based on our media samples) confirms this pattern: About 70% of all offered courses focus on the person (about 50% of the courses aim at an increase in the manager's competence through technical/factual knowledge; 20% concern personality factors and behavior), whereas only 30% aim at an improvement of the manager–employees interaction. Is the basic assumption then that a leader is “born” as compared to “trained/educated?” According to the data, a leader is required personality (as was stressed in the interviews), in particular integrity and trustworthiness (as questionnaire-based data and media data indicate). Vision, decisiveness, and social competence also seem to be important. Let us look at these attributes in a little more detail before we come back to the question concerning “born versus “trained/educated” leaders.

Integrity. Integrity is the characteristic scoring the highest in the questionnaire-based data. It was also mentioned as a preferred leader attribute in 30% of all media articles describing leader characteristics, as well as by 6 of our 10 interviewees. The relevance of integrity shows in particular in leader–follower relations and in references to negotiations. The term “eine Person mit Handschlagqualitäten” (“a person with handshake qualities”) refers to the symbolic act of finalizing a deal by shaking hands and then sticking to the agreement. The following quote from the media provides a good example: “They both have an extremely polite and extremely pleasant way of dealing with people, they are exceedingly correct and reliable. They are just the way business partners should be” (quote from a portrait of the two “managers of the year”; Wirtschaftswoche, December 1996, p. 40).

Having said that, the interview and focus group data also suggest that there are not too many leaders in Austrian business, let alone in politics, who indeed possess personality and integrity. Focus group discussants had problems naming suitable contemporary leaders; concerning politics, the men founding the Second Republic after World War II were attributed integrity, whereas today's politicians are not as well respected.

Vision. Vision, according to the questionnaire-based data, is another highly favorable leader attribute. Along the same lines, discussants of both our focus groups and part of our interviewees (implicitly) included vision into their definitions of outstanding leadership (cf. Appendix B). Also, most of the success stories in the media contain one or the other aspect of visionary thinking. Vision is described as a characteristic that someone possesses or does not; there are no references that visionary thinking could be trained in any way. Interestingly enough, however, none of the real-life examples described by our interviewees was labeled as visionary, not by the interviewees themselves or by us, the researchers, when we sorted the text segments into categories. The media data indicate that there are three kinds of barriers that hinder Austrian leaders from being visionary or prevent the translation of a leader's vision into deeds:

To summarize, visionary thinking seems to be an ideal in Austria, according to the questionnaire-based data more so than other attributes, yet there is a wide gap between the “Should Be” and the “As Is.” In other words, visionary thinking is considered an important ingredient of outstanding leaders, yet only few of them fit the ideal, for either personal reasons or constraints posed by the environment.

Decisiveness. This is yet another characteristic for which consistency between the media and the quantitative results was found. In the media sample, leaders were often characterized as being dynamic, determined, and making decisions and defending them. The media sample also included a couple of course offerings to gain more decisiveness, among them a workshop specifically for women. Our interviewees, on the other hand, did not explicitly define decisiveness as prerequisite for good leadership. Their examples, however, indicate that the attribute is desired and that real-life cases also exist:

Social Competence. With Austrian society placing heavy weight on the family and the economy, characterized by small to medium-size companies often owned and run by families, it is no surprise that the data frequently refers to existing or hypothetical family ties; one of the media articles, for instance, described the relationship of fellow business leaders “as if they were brothers.” Along the same lines, our interviewees also stressed trust, reliability, and support, that is, attributes very similar to the ones described for actual family relations, and used these concepts in their stories of good leadership, as the following quote by one interviewed manager shows:

Let us now return to the initial question concerning “born” versus “trained/educated” leaders. It seems from the data that the basic assumption is that leaders are “born.” Decisiveness and social competence are the attributes one can learn to a certain extent; the other factors (integrity and vision), however, are considered to be within the person and therefore have no connection to education and training.

Preferred Leadership Behavior

After this exploration of what a prototypical business leader in Austria could look like, the follow-on questions would of course concern likely leader–followers relations: How could the leadership style be described? How are decisions made?

Decision Making. The questionnaire-based results suggest which style Austrians are definitely not in favor of, namely an autocratic style. Likewise, the autocratic style was the one style repeatedly described in the media as being rated negatively by followers and having negative consequences for the climate of the group, as the following quote shows: “Since Mr. H. put this man in charge in 1991, the internal climate has steadily worsened. He won't have any argument; everything is dictated from the top” (statement by a member of the Freedom Party; Profil, December 9, 1996, p. 40).

The interviewees talked about different styles they preferred and also exercised. Among them were the democratic, the participative, and the collegial style. The latter style was described with possible downsides, as the following quote by a middle manager shows:“When the collegial leadership style is concerned, it's sometimes a bit difficult, so to say, to come up with a peremptory order and to say, ‘Friends, OK, from now on we'll do things differently.’ But I'm still convinced that this style is the better one.”

The interviewees used different terms, but what these terms have in common is a focus on democratic relations. From the interviews and other research we know that traditionally leadership in Austria was often paternalistic, sometimes autocratic. Today, however, more cooperative ways to lead are in favor, at least at the level of espoused values. The German term Mitarbeiter (coworker) is another indicator, as was already suggested earlier. The trend goes along with the societal shift toward more democracy as described in the section about societal culture.

Our findings fit well with the findings for Austria in the Vroom–Yetton (1973) studies, as mentioned before. Interpreting detailed findings, Maczynski et al. (1994) suggest the following reasons why Austrian managers prefer participative strategies:

That the group is seen as a forum that allows for conflict resolution shows in the GLOBE data as well. The item “intragroup conflict avoider” in the leader attributes questionnaire was rated as hindering a person from being an outstanding leader (Mean = 2.05). Why is conflict not considered negative in Austria? The German word Streitkultur (culture/norms stating how to handle disagreement/conflict to reach a positive result) comes to mind. Conflict is not a threat to the leader or the group and there is confidence that it will not escalate, but be solved in a cultivated manner. The leader plays a significant role here, because, as the interview data shows, it is the leader who is responsible for initiating and coordinating problem solving.

Is there more to be learned about participation? Participation seems to be contingent on the type of decision and this pattern of “contingent” participation shows in the interviews as well as in the media:

Supervision. This type of behavior was part of neither the questionnaire-based data collection nor the media data. However, it came up repeatedly in the interview data. For the majority of the interviewees, it seemed to be an integral part of their managerial role. The degree of supervisory behavior differed from story to story and from interviewee to interviewee, but it was there in any case. One interviewee called it “leading on the long leash.” This metaphor refers to a person walking a dog on the leash. A long leash gives the dog some freedom and space to explore its environment, but obviously only within a certain radius. Applied to the work life, a “long leash” means giving the employees space to come up with their own ideas and solutions. It does not mean, however, to let them work without any control, as the following quote by an interviewee shows: “The long leash to me does not mean that I lean back as a leader and just watch what's gonna happen”.

The overall process, from planning to results, is steered and coordinated by the leader, although allowing some input from the employees. In other words, although employees are supposed to work relatively independently, coordination and control seem still necessary, but with a benevolent touch: Mistakes on behalf of the employees can occur and then it is the leader's role to steer toward the right direction again.

Likewise, the degree to which employees participate in the process also varies and ranges from hierarchical control behavior on the one hand, to a common effort of manager and team on the other. Responsibility for the outcome was in all cases described as the individual responsibility of the leader, never as the group's responsibility. Because the leaders are personally held responsible for the projects/tasks that are undertaken by their group, the basic assumption probably is that they better control the process, in their own and the group's interest. Supervision in this form then is no contradiction to participation and to low Power Distance as found at the societal level, because it is part of the managerial role and not a means to exercise power.

Communication Style. As the interview data show, communication is one of the functions considered highly important by the interviewees, most of them in leading positions themselves: “[An open conversation] allows you to bring an argument to the open, so to say, I can fight the argument or come up with better ones myself.” Or, “We have these weekly talks, where we say, OK, what have we accomplished, where do we stand, what are we going to do next week?” And, “If people never come and say, I would like to know about this or that, or, could we talk about this, it's an extremely bad sign.”

In addition to that described previously, Zander (1997) found that Austrian employees prefer their managers to communicate with them frequently and show interest in personal communication. Thus, the focus on communication exists on both sides: It is stressed by superiors as well as expected by subordinates. The Vroom–Yetton (1973) studies confirm this pattern. The data show that Austrian managers, along with Germans and Swiss, have a stronger preference for CII (consulting with the group) and GII (group decision) strategies compared to the other countries in the study. And even when the normative model does not recommend the GII group strategy, as is the case when organizational goals are not shared by the group (goal congruence rule), Austrian managers still have a high tendency to go for GII (Reber et al., 2000). Staying within the framework of the Vroom–Yetton model, one may argue that Austrian managers seem to assume that by bringing the group together they might be able to convince them of the goals to share. Coming together as a group and talking things over might also be such a habit for the participants that it overwrites the question whether in a particular case a group discussion makes sense at all.

Consensus Orientation. Communication patterns as described previously serve as a basis for this final pattern that emerged from the data. A saying in Austria is “Durch's Reden kommen d'Leut zsamm” (talking brings people together; meaning communication solves problems). In this sense, the pattern described in the following has to do with negotiating and problem solving. The questionnaires included a couple of items that tackle these matters. The Austrian respondents rated these items as contributing greatly to a person being an outstanding leader: diplomatic (6.43), worldly (6.11), win/win problem solver (6.22), and effective bargainer (6.34).

But what do consensus-oriented negotiations “made in Austria” actually look like? The following two summaries are examples as found repeatedly in the media:

Both stories hint at consensus orientation and long-term orientation. In the first case, a compromise was found that satisfied both sides. In the second story, a bank's board member disagreed with a decision, yet did not vote against it. In both examples, the parties likely wanted to “keep their doors open” for the future.

Consensus orientation is not an isolated pattern found in the leadership data. As described earlier, we also found evidence for consensus orientation at the societal and organizational level, that is, in the form of the social partnership model and codetermination.

5.  CONCLUSION

Limitations of the Study and Suggestions for Future Research

Data were collected in 1995. Since then the political landscape in Austria has changed considerably. The consistency that shows in our data, that is, consensus and partnership orientation, seems to have been replaced by contradictions. If these values are indeed so deeply ingrained in Austrian society, then why did so many Austrians in the federal election of 1999 vote for the Freedom Party with an autocratic leader like Haider? Why are there today so many voices criticizing the social partnership model? Would the results of the survey look differently today? We think they would not, for the following reasons:

Managers are specific populations of any society. The question is whether the results they produce also hold true for other cohorts of a society. An initial comparison of managers and students in Austria and Ireland (Keating, Martin, & Szabo, 2002) suggests that similarities as well as differences exist between cohorts. The study indicates that the country effect is more dominant than the cohort effect in respect of both practices and values. However, there are also significant differences between the two cohorts, in particular concerning the dimensions Future Orientation, Gender Egalitarianism, and Collectivism. These differences may be attributed to cultural change, generational differences, and/or an idealized worldview of the younger population. Further studies are needed to explore these within-country variations and their underlying causes.

At the current stage, the GLOBE research concentrates on leadership ideals. These concepts are distant from actual leadership behavior and do not seem to be the best predictors for action. Future studies need to examine the link between values and practices in more detail (Szabo et al., 2001). What is also missing is contextuality, that is, the definition of the context under which leaders display particular behaviors (P. B. Smith et al., 2002²²).

Practical Implications

As described in the section on patterns in Austrian business leadership, leaders are expected to be consensus oriented, place a focus on communication, and practice a participative leadership style. It follows that employees are frequently involved in the leadership process, not just because it is the personal decision of the leader, but also because the structure of the Austrian system (social partnership model, codetermination, works councils) calls for it. The system gives Austrian employees “a voice” (Hirschman, 1970), similar to how the systems in Germany, Switzerland, and the Netherlands, that is, the other countries of the Germanic Europe cluster (Szabo et al., 2002), operate.

At a more general level, one can argue that there will most likely be a good understanding between Austrian managers and business partners from abroad at the managerial skills level, because technical/factual knowledge is in Austria, as in many other countries, influenced by Western management competence, often popularized by the United States. When person-specific or interpersonal issues (social skills) are concerned, however, differences should be expected, because it is in this area that culture comes into play. In a world of continuous globalization and convergence toward professionalism of managers, one should not underestimate cultural diversity. The goal should not be to try to harmonize the differences in the values area, or in an extreme case to allow that one type of value orientation dominates divergent views (Reber, 2001). It is not acceptable (and likely to be impossible anyway) to train managers to completely change their values and behavioral leadership pattern. Rather, managers with different cultural backgrounds should be allowed to stay like they are, but should ideally be equipped with an increased awareness of their differences. Training is useful and possible in the area of cultural awareness: Cultural patterns reside in the unconscious, but making them explicit is a step toward improved interactions of people of different origin, in business as well as in political and social interactions.

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Appendix A

Basic Information on Austria²³

LOCATION

Austria is located in Central Europe and has a land surface of 82,730 square kilometers (31,942 square miles). Austria is topographically dominated by the Alps in the south and west, whereas its eastern provinces lie within the Danube basin. Although small in size, Austria shares borders with eight countries, namely Germany, the Czech Republic, Slovakia, Hungary, Slovenia, Italy, Switzerland, and Liechtenstein.

POPULATION

The Austrian population totals 8.19 million (July 2006 estimate; World Factbook, 2006), some 98% of whom are German-speaking, the official language of the Republic of Austria. There are six ethnic and linguistic minority groups officially recognized in Austria. These groups are concentrated in the eastern and southern parts of the country and have been accorded specific rights by federal law. In terms of religious allegiances, 74% of Austrians are Roman Catholic, a further 5% Protestant. About 9% of the population belongs to a different faith, 12% to no religious group at all (2001 census; World Factbook, 2006). Life expectancy is 76 years for men and 82 years for women; the fertility rate amounts to 1.36 (2006 estimates; World Factbook, 2006).

Austrians are stereotypically described as gemütlich (sociable), having a communication style that includes Schmäh (a concept in between humor and biting irony; in particular the Schmäh of the Viennese population is legendary) and sudern (similar to complaining, finding a negative aspect in even the brightest situations), and sometimes showing behavior that is called durchwursteln (muddling through).²⁴ We would like to stress that these factors, like all stereotypes, might not apply to the individual Austrian, however, a little truth might still be found in these stereotypical attributes.

CONSTITUTION AND GOVERNMENT

Austria's constitution provides for a federal democratic republic embracing nine provinces including the capital Vienna; that is, Vienna is a city and a province. The national government consists of a president whose functions are largely ceremonial, a cabinet headed by a chancellor, and a bicameral legislature. The chancellor and the cabinet members are appointed by the president usually from the party with the strongest representation in the lower house, the National Council (Nationalrat). The upper house, the Federal Council (Bundesrat), represents the provinces and is restricted to a review of legislation passed by the National Council. Its decisions have only delaying powers. The two houses together constitute the Federal Assembly (Bundesversammlung), whose approval in full sitting is required in certain contingencies, for example, the recall of the federal president prior to the end of the term of office. Although most effective power is at the federal level, the provinces have some latitude in local administration. Each province has an elected legislature (Landtag) and an administration headed by a governor (Landeshauptmann) designated by the legislature. The judicial system is headed by the Supreme Judicial Court (Oberster Gerichtshof) and includes two other high courts, the Constitutional Court (Verfassungsgerichtshof) and the Administrative Court (Verwaltungsgerichtshof). There are four higher provincial courts (Oberlandesgerichte), seventeen provincial and district courts (Landes-und Kreisgerichte), and numerous local courts (Bezirksgerichte).

EDUCATION

Total government expenditure spent on education is close to 8%. Compulsory schooling lasts nine years. Austria's school system is governed by uniform regulations nationwide. No fees are charged for attendance at state-run schools. Austria has nineteen universities, including the University of Vienna, which was founded in 1365. The successful completion of the final, rather comprehensive and demanding high school examination (“Matura”) gives the student the right to study at any national university she or he selects. As of the 2001/2002 academic year, students are required to pay a modest tuition fee for each term they attend university.

Appendix B

Definitions of Outstanding Leadership

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¹Historical leaders most frequently mentioned were the Emperor of the Austrian Hungarian Empire, Kaiser Franz Joseph I (1830–1916) and Adolf Hitler (1889–1945). According to the study, contemporary well-know Austrian leaders and Bruno Kreisky (former federal chancellor of Austria; 1911–1990) and Kurt Waldheim (former secretary general to the United Nations and former federal president of Austria; born 1918). The one Austrian scientist named repeatedly was Sigmund Freud (1856–1939), founding father of psychoanalysis.

²What remained of this time is the traditional Viennese coffee house.

³In 1919, the Austrian writer Karl Kraus (1874–1936) finished the drama “Die letzten Tage der Menschheit” (“The last days of mankind”), which gives a critical record of the events leading to and during the war.

⁴Former chancellor Bruno Kreisky is quoted saying, “If we had known of the dangers threatened by Germany in 1930, history would have taken a different turn” (Österreichischer Rundfunk [ORF], 1990).

⁵The plan was initiated by U.S. Secretary of State George Catlett Marshall.

⁶After a journey to Europe in 1910, the American President Theodore Roosevelt is quoted saying that apart from the Austrian Emperor no other European leader of state had impressed him (Kleindel, 1978).

⁷Hitler wanted to become an artist but was not accepted as a student by the Art Academy of Vienna.

⁸Both Kreisky and Brandt lived in exile in Sweden during World War II.

⁹This index is measured by life expectancy, educational attainment, and adjusted income per capita in purchasing power parity U.S. dollars.

¹⁰In a referendum in 1978, a close majority of the Austrian population voted against the use of nuclear power.

¹¹LD stands for Linz and Donawitz, the two Austrian cities hosting steel plants.

¹²The year 2004 saw 117.3 million overnight stays of foreigners in Austria, among them 51.0 million stays by guests from Germany (Statistisches Jahrbuch Österreichs, 2006).

¹³According to this strategy, the benefit of selecting interviewees who are different from each other in some important ways is “to force differences to show up; if they don't, then you know that the patterns that are common across all interviewees are more likely to be common to managers, however else they might differ from each other” (Agar, n.d., Qualitative Research Manual I, p. 27).

¹⁴Gross national income minus public and private consumption, in percentage of the gross domestic product. Statistics by the OECD, published in Der Standard, October 4, 1994.

¹⁵The term stands for kaiserlich and königlicher Hofbäckermeister, which in translation means “the exclusive baker to the Austro-Hungarian Emperor's Court.”

¹⁶A referendum is a form of direct democracy anchored in the Austrian Constitution. If a referendum exceeds more than 100,000 votes, it has to be dealt with in the Federal Parliament.

¹⁷The number of refugees seeking asylum in Austria went down from 27,306 in 1991 to a mere 6,719 in 1997. It increased again in the following years, mainly because of large numbers of refugees from former Yugoslavia (Statistisches Jahrbuch Österreichs, 2006). However, Amnesty International Österreich (2001) criticizes the restricted asylum policy of Austria, with only one third of all applications being accepted, often only after a very lengthy process.

¹⁸The survey was conducted in 1994 and published in Der Standard, December 19, 1994, p. 5.

¹⁹The Vroom–Yetton (1973) model is based on a problem set containing 30 decision-making situations, which are administered to managers who are unfamiliar with the model at the time of data collection. Respondents are asked to choose their behavioral responses to each of the 30 situations; their answers are from a set of five alternative strategies (ranging from highly autocratic to highly participative). The model also consists of seven diagnostic questions that help the manager to understand the situational characteristics of a decision-making situation. Finally, the model comprises behavioral rules. The application of these rules calls for the exclusion of certain strategies and thereby assures decision quality and decision acceptance.

²⁰This study explores how employees in 18 countries prefer to be managed (named license to lead), and whether culture affects their preferences.

²¹The Austrian managers’ behavior is in contrast to French, Finnish, U.S., Polish, and Czech managers, who become more autocratic when conflict is likely to arise among subordinates (Maczynski et al., 1994; Reber et al., 2000).

²²This study presents data showing how middle managers in 47 countries report handling eight specific work events. The data are used to test the ability of cultural value dimensions to predict the specific sources of guidance on which managers rely.

²³Unless otherwise state, the information in Appendix A is taken from the statistical profile of the GLOBE society sample (House et al., 2004) and World Desk Reference (2000).

²⁴A wonderful example of this type of Austrian is “Der Herr Karl,” a satiric figure portrayed by the late Austrian actor Helmut Qualtinger (Merz & Qualtinger, 1961/1988).