The Dragon Network: Inside Stories of the Most Successful Chinese Family Businesses

Chapter 7

Leadership Styles of Overseas Chinese Family Businesses

Leadership style refers to the behavior of a leader based on his or her personality, philosophy, and background. There are some leadership styles that can be applied by leaders of any organization, including leaders of Chinese family businesses.

Suitable leadership style depends on the situation faced by the leader. An autocratic leadership style may be most effective when there is a time limit to decide something or when leaders have more knowledge, skill, resources, and experience compared to their followers. However, in an organization where employees have high motivations and various skills, a more democratic leadership style should be applied. A leader must choose a leadership style which is the most effective in helping the organization achieve its goal, while at the same time accommodating the employees’ interests and aspirations. So, we can say that there are no right or wrong leadership styles.

From Dictatorship to Democracy

In the early years, when the business had just been established, Chinese family business founders, without a doubt, adopted an autocratic or authoritarian leadership style. In authoritarian leadership, a leader has an absolute and unchallenged power, controls his or her followers tightly, and asks his or her followers to obey without asking any questions. Authoritarian leadership is one of the three dimensions of paternalistic leadership, according to Cheng and Lim (2012). The other ...