TABLE OF CONTENTS

1.0 INTRODUCTION ............................................................................................................ 2

1.1 Backgrounds of the MNCs ............................................................................................. 2
1.1.1 Malayan Banking Berhad (Maybank) ..................................................................... 2
1.1.2 Samsung Group ....................................................................................................... 2

2.0 DISCUSSION & ANALYSIS .......................................................................................... 3

2.1 Leadership Styles of Maybank ....................................................................................... 3
2.2 Leadership Styles of Samsung ....................................................................................... 6
2.3 Type of Leaders.............................................................................................................. 9
2.3.1 Transformational leadership of Maybank ............................................................... 9
2.3.2 Transactional and autocratic leadership of Samsung ............................................ 12

3.0 SUMMARY ..................................................................................................................... 15

4.0 REFERENCES................................................................................................................ 16
1.0 INTRODUCTION

1.1 Background of the MNCs

1.1.1 Malayan Banking Berhad (Maybank)

Maybank started its operation in 1960 with a headquartered located in Kuala Lumpur as a
company offering a comprehensive range of products and services that includes commercial
banking, investment banking, Islamic banking, offshore banking, leasing and hire purchase,
insurance, factoring, trustee services, asset management, stock broking, nominee services,
venture capital and Internet banking (Sustainability Report, 2014). Today, Maybank is the
largest company by market capitalization listed on Bursa Malaysia whereby the Group was
ranked first among listed Malaysian companies and among top 500 companies in the Forbes
Global 2000 leading companies of the world (Annual Report, 2017).

Maybank is among the region’s leading banking groups with its roots embedded deep
in the heart of the ASEAN community. Upon its establishment in 1960, Maybank then began
venturing into regional markets in its early years, expanding progressively to become the
South East Asia’s fourth largest bank by assets. The Group operates from its three key ‘home
markets’ of Malaysia, Singapore and Indonesia, across all 10 ASEAN nations as well as other
key Asian countries and global financial centres (Annual Report, 2017). With a history
spanning over 54 years and a network of 2,400 offices, Maybank has developed unique
insights into the needs of every customer segment, whether retail, SME or multinational, and
consistently demonstrates the ability to offer innovative solutions for all.

1.1.2 Samsung Group

Samsung was founded by Lee Byung-chul in 1939 as a small trading company located in Su-
dong, Korea. Samsung Group is South Korea’s largest company and exporter and the world’s
second largest conglomerate, only behind U.S based General Electric. Currently managed by
Moon Jae-in, it has been run by generations of one of the world’s wealthiest families.
Samsung’s focus upon its establishment was primarily on trade export, selling dried Korean
fish, vegetables, and fruit to Manchuria and Beijing before the Company embarked into a
journey of exploring the electronics industry in the year 1968 by introducing Samsung
Electronics.

Today, Samsung managed to transform itself from a low-cost original equipment

manufacturer to a world leader in R&D, marketing, and design, with a brand more valuable

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than Pepsi, Nike, or American Express (Khanna, Song, & Lee, 2011). The successful
diversification became a growth strategy for Samsung, which rapidly expanded into the
insurance, securities, and retail business (Burris, 2018). In 1987 with the death of Lee Byung-
chull, the Samsung group was separated into four business groups leaving the Samsung
Group with electronics, engineering, construction, and most high-tech products. A total of
320,671 employees work across Samsung Electronics' global network spanning across 73
countries including Malaysia, with 15 regional offices, 39 production sites, 35 R&D centers,
and 7 design offices.

2.0 DISCUSSION & ANALYSIS

2.1 Leadership Styles of Maybank

Leadership is a process of interaction between leaders and followers where the leader try to
influence followers to achieve a common fixed goal (Northouse, 2010). In Maybank,
developing highly engaged and committed employees have always been the central focus in
the management and leadership of the Group and this focus underlies the various leadership
efforts taken by the top management of the Group. Maybank is also focusing on resources
and talent across borders, wherever its offices are, as it builds the workforce of the future -
one that is agile, diverse, and collaborative.

In order to develop highly engaged and committed employees, the leaders of

Maybank has resorted to a leadership style which emphasizes on effective communication
that supports employee engagement and encourage them to speak up (Leaderonomics, 2015).
Engagement in this context means employees know what their business is trying to achieve,
they understand their role in that effort and feel motivated to play a part in the company’s
success. The leaders at Maybank therefore emphasize the importance of having effective two-
way communications between the leaders and its employees. Communication channels are
therefore central in Maybank’s efforts towards encouraging employee engagement and its
leaders have made it as part of the Group’s culture to have honest, open, and trusting (H.O.T)
conversations to further their common goals. The top management of Maybank assesses the
level of employee engagement in the organization to uncover strengths and improvement
opportunities that would enable them to nurture a culture that supports high performance
which would bring about the organization’s desired bottom line. Assessing employee
engagement is a vital and effective feedback mechanism among the many feedback avenues

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Maybank have in place. It provides employees a chance to speak their minds anonymously
(Sustainability Report, 2014).

Besides that, various channels are also put in place for employees to communicate
with the leaders of the Group. These channels include the Group PCEO and Sectorial
Townhall sessions, Conversation Series with Group EXCO and Chairman, and the Group
EXCOs’ LTL (Leaders Teaching Leaders) sessions (Sustainability Report, 2014). The
quarterly Group PCEO Townhall is a great cross-cultural platform established by the leaders
of the Group which gathers approximately 800 managers from around the world, connected
via webcast, to view and participate simultaneously in the session held at the Group’s
corporate headquarters in Kuala Lumpur. In addition, Maybank also have its internal Help
Desk hotlines and the Ask Senior Management (ASM) email channel. In 2014, 139 questions
raised through this bottom-up channel triggered actions that have been successfully translated
into new ideas on staff facilities, the office environment, and customer-impacting issues
(Annual Report, 2016). These engagement platforms are designed for leaders to map out
clear direction, and set and clarify expectations as well as foster staff engagement.

Not only that, Maybank leaders also provides opportunity for its employees to voice
out their opinions freely especially on new innovative ideas which can be developed and
implemented by the Group. This effort is carried out through a weekly dialogue session
known as Value Chats or better known as V-Chats between the appointed group-wide
‘Champions’ and its employees to listen, share stories, and generate feasible ideas that can be
implemented (Sustainability Report, 2014). As an incentive to promote and recognize
groundbreaking ideas, the campaign incorporated a competitive element. The best overall
idea for each theme received a prize of $1,500, while the top 10 ideas received $250 each
(Sustainability Report, 2014). Maybank has received over 1,400 ideas through the campaign,
and 80% of the ideas generated have been successfully implemented, while 20% are being
fine-tuned for rollout. The tangible outcomes of V-Chats are an example of how the leaders at
Maybank are continuously improving operational excellence, productivity, and performance
levels as well as constantly inspiring employees throughout the Group.

The leadership style adopted by Maybank also focuses on breaking the traditional
work boundaries into open ecosystems to enable greater collaboration and democratize how
the organization is managed all the way to the top. The regionalization of Maybank’s online
employee self-service portal, myHR2u, was a significant initiative taken by the leaders of the

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Group that was completed in 2014. Forty manual processes were converted to complete
online processes. For convenience, myHR2u is available on mobile devices through the
myHR2u Mobile-On-The Go app. Maybank HR Helpdesk hotlines received an average of
23,000 queries from its employees in 2014 via email and telephone (Sustainability Report,
2014).

In addition, top management of Maybank also empowers its employees by allowing

the employees to contribute towards the innovative efforts of the Group. To acknowledge the
talent and creativity of its human capital, Maybank has initiated its inaugural ‘crowd-
sourcing’ innovation platform back in 1996. Originally known as the Innovation Proposal
Award (IPA), it later evolved to become the President’s Innovative Ideas Award (PIIA) in
2011 with the objective of recognizing the best ideas and raising innovation awareness
throughout the Group (Singgam & Gomez, 2017). Not only that at the inaugural virtual
Global Innovation Showcase, more than 350 Maybank employees from 10 countries
including Bahrain, Indonesia, Brunei, Cambodia, Laos, Philippines, Singapore, United
Kingdom, Vietnam, and Malaysia came together online.

Organizational learning also becomes the central focus of Maybank’s leadership. This
is evident when the Group continues to deploy best-in-class learning and development
programs to nurture its employees at all levels of the Group’s operations across the regions
(Singgam & Gomez, 2017). In supporting organizational learning, the leaders of the Group
has put in place a 70:20:10 (experiential learning: coaching, mentoring, and networking:
formal learning) structured integrated learning framework ratio that emphasizes experiential
learning to help their employees develop greater passion for self-learning and provides them
with a holistic learning programs (Sustainability Report, 2014).

Due to its massive global operations, the leaders of Maybank also have put in place
mechanisms to deal with various cultural differences and conflicts which may occur in its
operation. The leaders of the Group realized that a large organization with over 47,000
employees across multiple countries needs functional channels for solving any problems or
complaints arising among staff. The Group’s grievance mechanism that it has in place
enables employees to raise issues such as dissatisfaction regarding conditions of employment,
relationship with colleagues or supervisors, or cultural and gender discrimination. When a
grievance report is filed, an investigation will be conducted with all necessary due process
and appropriate actions taken. The due process for resolution of grievance is undertaken upon

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receipt of a grievance after which a meeting is called. If no agreement is reached, the
complaint is escalated to the branch level and the union will attend the negotiations. The final
level of negotiations is with the union standing committee at the national level. Unresolved
complaints at this stage will be referred to the Ministry of Human Resources. In 2014, a total
of 37 grievances were received and all were resolved (Sustainability Report, 2014).

The leaders of the company are also committed in reducing conflicts and differences
cause by the cultural diversity of its workforces by increasing the multicultural awareness
within the organization. As the Group grows regionally, it has increased the number of
trainings given to its employees on multicultural awareness. Maybank also encourages a
high-performance culture across the Group in the spirit of its core values: T.I.G.E.R.
(Teamwork, Integrity, Growth, Excellence and Efficiency, and Relationship Building). The
leaders of Maybank believed that different variations of tools and resource structures are
required to operate as a regional workforce rather than just being a group that happens to
have a lot of different locations around the world. Putting all those pieces together into a
coherent, global human capital strategy - covering talent, leadership, culture and
organizational structures have been the leadership focus for the Group for the past few years.

2.2 Leadership Styles of Samsung

The leadership styles at Samsung have evolved drastically throughout its years of operations
with the latest changes includes the progressive elimination of strict bureaucracy and
hierarchical practices in its management. Strict bureaucracy and aristocracy are the two most
common components of the leadership styles adopted by Korean leaders considering that
these two elements are, after all, written into Korean corporate DNA and some of its core
behavioral code. Korean companies have inherited 1,000 years of bureaucracy since its
ancient time whereby in Korean history and culture, bureaucracy and aristocracy were
intertwined (Michell, 2010).

With the change in its leaderships, Samsung is now on its way to overhaul its long-
decade rigid corporate structure which underlies its operations since the company was
incorporated in 1939 to cope with the rapidly changing business environments across the
world. Among the efforts taken in eliminating the rigid corporate structure includes
simplifying corporate titles and reducing the layers in its organizational structure in order to
pursue speedier decisions in responding to market changes (Lee, 2016). The firm was
previously operated based on a five-tier system with five distinct ranks of employees which

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come with a prescribed title for each rank (Kim, 2016). A graduate employee receives a
"sawon" title. After more than four years of experience, they are awarded the "daeri" title.
"Kwajang" is the title usually given to workers in their late 30s and early 40s with seven or
more years of experience. An employee with more than 10 years or less experience is entitled
to the title, "chajang," which is a deputy team leader. "Bujang" is just below an executive
position. Usually, "bujang" handle some key tasks and report daily to executives (Kim,
2016).

Leadership style in Samsung also is one that emphasizes on the large power distance
between the top management and the front-line employees which does not encourage lower
level employees to communicate and share their opinions and ideas, and propose initiatives
and alternatives to their leaders even though such ideas and initiatives may prove to be
insightful and play an instrumental role in new product development or adding innovative
capabilities or features to existing products (Mitchell, 2010). However, this has started to
change in 2016 when the top management of the company signed the declaration to eliminate
authoritarianism within the organization (Sustainability Report, 2017). With the elimination
of authoritarianism style of leadership within the organization, the leaders have resorted to
the use of collective intelligence platform to host discussions between the top management
and employees, and expand horizontal communication to encourage more two-way
communication between the top management and the lower level employees (Sustainability
Report, 2017).

The leaders at Samsung also have introduced a more performance-oriented

compensation scheme under the goal-based performance management (Sustainability Report,
2017). The top management of the company will measure the performance of the employees
based on the established goal and use the outcomes as source data in compensating,
promoting, and nurturing individuals and in selecting leaders (Mitchell, 2010). Such
performance evaluations consist of achievement evaluations made from the work process,
result perspective and competency evaluations made from the individual capacity and career
management perspective. This follows the four steps of setting goals, conducting
intermediate and year round interviews, conducting evaluations, and performing interviews to
discuss the results. To enhance the fairness of this process, the leaders use a computerized
system in performing evaluation, provide evaluation manual and regular evaluator trainings
to enhance evaluator’s capability (Rani et. al., 2016).

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 Leadership styles adopted by Samsung leaders which focus on performance is
reflected in the reward system put in place for its employees. Samsung offers its employees
performance incentives in the form of reward program that gives employees as much as 50
percent of their annual salaries as bonus if their division falls within the 20 percent of the
company’s excess profits (Sammobile.com, 2016). Any poor performance showed by the
division however would result to the bonus offered to the employees being cut down. This is
apparent in the scandal of Samsung Galaxy Note 7 which exploded. According to the articles
published in The Korea Times (2016), a bonus cut was decided after the exploding Galaxy
Note 7 debacle for all employees working in the Samsung mobile division. The bonus
percentage for the mobile division was reduced from 50 percent in the previous years to
merely 17 percent following the issue with its Galaxy Note 7 (The Korea Times, 2016). Since
bonuses are tied to the division’s annual profits and the Galaxy Note 7 has taken a substantial
chunk out of them, the employee bonuses were impacted in a similar fashion.

In order to reduce or avoid any conflict cause by cultural differences, Samsung’s

leaders have introduced Samsung Culture Index in 2012 whereby an extensive survey on job-
satisfaction including level of trust or fatigue for all the employees in global-scale was
conducted (Rani et. al., 2016). For those departments or regional branches whose score was
low as a result of such surveys, customized consulting is provided to improve their work
environment. The SCI survey consists of five categories of Work Smart, Think Hard, Build
Trust, Leadership and Policy (Sustainability Report, 2017).

In addition, to reduce the intercultural conflicts which may exist between the Korean
leaders leading Samsung’s branches across the globe and the managers working directly
under them, The Global Leadership Platform has been introduced by the top management of
Samsung, with the help of Global Dynamics Inc. (GDI), to resolve the cultural
misunderstandings which may occur in its regional and overseas branches. According to
GDI’s official website, the Platform brought together non-Korean managers from around the
world whereby a series of seminar were developed through the Platform and delivered to the
non-Korean managers across the world to familiarize them with the Korean culture including
the core Korean values, leadership styles and communication styles. Additionally, the
platform also collected numerous case studies on major challenges faced by the non-Korean
managers which were then delivered to the Korean leaders of the company. Through this
process, Samsung was able to create specific behavioral steps that non-Koreans and their

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Korean counterparts could take to improve mutual understanding and trust amidst the
differences in cultural background (Rani et al., 2016).

2.3 Type of Leaders

2.3.1 Transformational leadership of Maybank

Transformational leadership has been the most studied leadership theory for the last 30 years
(Díaz-Sáenz, 2011) since it was introduced to wider audiences by Burns (1978). Burns (1978)
suggested it was time to bring together the concepts of leadership and followership, because
leadership is about more than using the power of subordinates to fulfill a leader’s desire. It is
about “leaders inducing followers to act for certain goals that represent the values and the
motivations of both leaders and followers”. Bass (1985) on the other hand coined the term
transformational leadership, describing such leaders as change agents that elicit and transform
followers’ beliefs, attitudes and motivations. These leaders provide a vision and develop an
emotional relationship with their followers, increasing the latter’s consciousness and belief in
higher goals, above their own interests.

In transformational leadership theory, both leaders and subordinates are engaged in a

common purpose and lift each other’s motivations higher than they thought was possible
(Bass & Riggio, 2006). This is done in three ways: “expanding the subordinate’s needs, by
focus on transcendental interests, and altering or widening the subordinate’s level of needs
for self-actualization on Maslow’s hierarchy” (Bass, 1985). Thus, the leader makes the
subordinate understand the value of the desired outcome or helps to expand the possible ways
of reaching the goal. Secondly, the leader is able to create a culture or situation in which
everyone pitches in for the team and sacrifices their self-interest. And finally, the leader is
able to excite the subordinate to fulfill his or her potential through working processes rather
than focusing on safety, affiliation, or recognition (Bass, 1985).

In addition, leaders themselves learn more in the process “by responding to individual
followers’ needs by empowering them and by aligning the objectives and goals of the
individual followers, the leader, the group, and the larger organization” (Bass & Riggio,
2006). According to Tichy and Devanna (1986), transformational leaders need to recognize
the need for change, create a new vision, and then institutionalize that change by motivating
people and using creative destruction. The needed change may deal with new goals and
strategic directions, but also with increased effort or changes in attitudes. These change

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promoting leadership styles have also been called democratic and relationship orientated
leadership (Bass, 1985).

Empirical evidence has consistently demonstrated that transformational leadership

could produce positive results such as leadership effectiveness, development of
organizational citizenship behavior, follower commitment to the leader and the organization,
as well as follower satisfaction on the job (Rowold & Heinitz, 2007). These are possible
considering that transformational leaders interface with followers in a mutually enriching
environment that allows them to realize their higher-order needs and enables them to initiate
a process of self-growth and transformation (Khanin, 2007). Not only that, Burns (1978)
emphasizes that transformational leaders have a vision and challenge others to do
extraordinary works. He believes that transformational leaders are able to draw new
necessary routes for modern organizations because that they are the source of changes.
In other word, transformational leaders have complete influence over organizational changes.
This kind of leadership can draw a clearer and better picture for future, define its vision for
employees more effectively and the employees will accept their vision as a fact interestingly.

Transformational style of leadership is apparent in the management of Maybank

Group. This is based on the approaches put in place by the leaders of the Group which
resembles the theories of transformational leadership discussed above. One of the
transformational elements displayed by the leaders of Maybank is their approach towards
encouraging openness in communication between the top management of the Group and their
employees. From the discussion regarding the leadership styles of Maybank leaders, it is
evident that the leadership philosophy underlying the leadership efforts undertaken by
Maybank leaders is one that emphasizes openness within the operation. This is reflected in
the emphasis that the leaders put in encouraging an open two-way communication between
the top management of the Group and its lower-level employees through various
communication platforms established and implemented including the Group PCEO and
Sectorial Townhall sessions, Conversation Series with Group EXCO and Chairman, and
many more. Openness is also included as one of the core elements in the Group’s
communication culture set by the leaders of the Group which are honest, open, and trusting.

Not only that, as elaborated above, transformational leader is a leader who provides a
vision to its followers and work towards motivating his followers in achieving the vision by
consolidating the company’s vision with that of its employees. This is evident in the case of

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Maybank whereby the Group’s leaders supports employees’ engagement whereby employees
know what the objectives and vision that the business are trying to achieve, and they
understand their role in that effort and feel motivated to play a part in the Group’s success.
This was specifically done by way of enabling the employees to take part in the Group’s
entire operation by giving them the opportunity to voice out their opinions and ideas freely
without any restriction imposes by the leaders. The efforts were carried out through various
platforms by the leaders, as discussed previously, including the weekly dialogue session
known as V-Chats. To increase employee’s motivation in becoming part of the business’
success, the leaders also offer an incentive reward system in the hope to motive employees’
engagement in the overall operations of the company.

Transformational leadership is also apparent in Maybank when its leaders provide

platforms that enable employees to discover their passion in an attempt to enable their
employees to fulfill their self-actualization needs under the Maslow’s hierarchy. Among the
efforts undertaken by the Group’s leaders to widen the level of needs satisfaction among the
employees include allowing their employees to go on sabbatical leave and assume other jobs,
perhaps even start their own business or engage in an employment which is not in conflict
with the interest of the bank to discover their passion (Leaderonomics, 2015). The leaders of
Maybank believe that allowing their employees to fulfill their own passion and desire will
help to increase employee engagement and leading to a more engaged workforce.

Transformational leaders can shape the future of the organization by transforming the
organization in search for higher efficiency and productivity. Among the strategies which can
be implemented by transformational leaders to bring organizational success include (Gomes,
2014):

a) Existence of explicit, understandable, useful and incentive vision, set up on the basis
of organization's needs, to which will all organization members refer.
b) Creation of social ambience, by making form and shape for common attitudes of all
organization members.
c) Making confidence in organization by clearly pointing up own attitudes and being
consistent in their realization, which is closely related to reliability.
d) Leader's creative own evolution through positive self-respect based on self-
competences, controlling tasks and general (strategic) organization objectives.

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2.3.2 Transactional and autocratic leadership of Samsung
Transactional style of leadership is comprised of behavior of an exchange between the
leader and follower, where rewards are always linked with the effort and output produced by
the subordinate (Burns, 1978). In other words, under transactional style of leadership,
followers will be rewarded with valuable outcomes when they act in accordance with the
leader’s performance expectations (Mester et. al., 2003). There exists an exchange or reward
or punishment from the leader to the followers for the work performed, and in exchange the
leader expects effort, productivity and loyalty (Naidu & Van der Walt, 2005). Under this
style of leadership, the exchange forms the foundation of the leader-follower relationship
(Howell & Hall-Merenda, 1999). This is in congruence with Burns (1978) views of
transactional leadership whereby he described it as more of “give and take” type of
relationship at work, where exchange is a major form of interaction between superior and
subordinate, such as monetary rewards for achieving set objectives. Burns (1978) further
argued that followers are guided and at same time limited to the tasks assigned to them.
Remuneration under transactional style of leadership is fixed on hierarchical order and
organization’s bureaucracy.

According to Zaleznik (1977), transactional leaders are those who set goals for their
followers, allocate tasks and get the work done, and finally reward those followers who
perform better and punish those who do not perform. In the organizational behavior studies,
they have widely used the type of transactional leadership style as effective style which can
motivate the followers to enhancing their inspiration to achieve the objectives of the
organization. Burns (1978) pointed out those transactional leaders are motivating their
followers through appealing them to their self-interests. The theories of transactional
leadership are based on the idea that leader-follower relationships are based on a number of
exchanges or implicit bargain between them. Transactional leadership is characterized by
behaviors and attitudes that emphasize the quality of exchanges between superiors and
subordinates. Bass and Stogdill (1990) elaborated that the achievement of tasks and goals are
the responsibilities of the leaders who are the main actors to motivate the followers in
identifying the objectives and developing confidence to meet the desired high performance
levels.

Authoritarian leadership on the other hand refers to a leader’s behavior of asserting

strong authority and control over subordinates and demanding unquestioned obedience from
them (Farh and Cheng, 2000). It is characterized by individual control over all decisions and

12
little input from group members. This is in congruence with the leadership literatures
available which argued that leaders who are highly on authoritarian demand their
subordinates to achieve best performance among the organizations and make all the important
decisions in their team (Wang et al., 2013; Zhang and Xie, 2017). Autocracy means “an
unconditional claim to the right to rule” of any bodies or groups exclusive of all others
(Çaylak, 2008). It implies a high degree of control by the leaders without much freedom or
participation of members in group decisions (Choi, 2007). It adopts blind obedience rather
than freedom of choice.

Authoritarian leaders prefer to establish strict regulations, control processes and

remain in formal, professional relationships with their subordinates (Maloş, 2012). It is one in
which the leader retains as much power and decision-making authority as possible. The
leader typically does not consult employees, nor are they allowed to give any input.
Employees are expected to obey orders without receiving any explanations. The motivation
environment is produced by creating a structured set of rewards and punishments.
Authoritarian leadership also is characterized by large power distance that exists between the
leaders and the followers. Under the autocratic leadership, much of the power is concentrated
in the hands of a few leaders or even one person. This style of leadership complements high
power distances because senior leadership can isolate itself from others.

In the case of Samsung it is evident that the leaders of the company have adopted the
use of both transactional and authoritarian style of leaderships in managing and leading the
company. Although the leaders of the company is moving towards a more transformational
approach of leadership, but traditionally the company has been led under the transactional
and authoritarian approach. As discussed in the earlier part of this report, there exists a large
power distance between the leaders of Samsung and its lower-level employees. This is
evident from the five-tier ranking system which has been the central organizational structure
of the company since it was established. The large power distance has led to the clear
separation between the leaders who sit at the top of the management and their subordinates
who occupy the lower rank positions which resembles that authoritarian style of leadership
whereby much of the power in the company is concentrated in the hands of the few top
leaders and senior leaderships isolating themselves from their lower level subordinates and
followers (Terzi, 2011).

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 Authoritarian leadership is also apparent in Samsung when lower level employees are
not given enough opportunity and supports to communicate their ideas, opinions, or
suggestions to their leaders who are in a higher rank than themselves. The rigid hierarchical
structure driven by the establishment and implementation of the five-tier ranking system
requires employees to go through each step of the job ranking ladder in order to report to
their leaders. This therefore restricted the employees’ ability to communicate any innovative
or fresh ideas that they have directly to the top management considering that they need to
obtain the approval from various people in the ranking system first before finally arriving at
the highest level of management.

In addition, transactional leadership is also evident from the formulation and

implementation of compensation and reward system that is performance-oriented according
to the goal-based management initiative adopted by the leaders. This is in congruence with
the core essence of the transactional leadership theories that emphasizes on the exchange of
reward or punishment for good or bad performance between the leaders and followers. In the
case of Samsung, the performance of the employees is measured and this data will be used in
compensating, promoting, and rewarding employees. As mentioned before, good
performance which resulted in an increase of the company’s profitability will be rewarded
with as much as 50 percent bonuses while bad performance which resulted to loss of profits
or revenues will lead to punishment including a drastic cut to the amount of bonuses given to
the employees involved. This element of transactional leadership is reflected in the case of
Galaxy Note 7 recall whereby the bonus for employees working in the mobile division was
cut more than half due to the loss incurred by the company cause by the division.

While transactional and authoritarian leadership styles may be viewed in a negative

light as compared to the transformational leadership, transactional and authoritarian leaders
also contribute to the success of a company. Autocratic leaders give their subordinates clear
and short instructions on what to do and how to do it. This helps to perform tasks effectively,
solve identified problems, and meet targets or deadlines, in particular when time is a critical
factor (Sauer, 2011). This then led to the improvement in performance of the company on a
short-run (İnandi, Uzun, & Yeşil, 2016). In addition, the elements of rewards under the
transactional leadership are often highly value by employees of any cultural backgrounds and
leaders can use this to stimulate higher level of efficiency and productivity (Shah et. al.,
2015). Leaders of Samsung also should take advantage of the clear organizational structure
and system outlined under the transactional and authoritarian styles of leadership. This helps

14
to provide employees with a clear chain of command and allow them to know what is
expected of them at all times. Each party in the structure are assigned with specific tasks and
responsibilities and they can therefore focus their efforts towards excelling at the tasks
assigned to them.

3.0 SUMMARY

The report has thoroughly discussed the transformational leadership style adopted by
Maybank leaders as well as the transactional and authoritarian leadership styles used by the
leaders in Samsung. From the earlier discussion, it is apparent that there exist stark
differences between the leadership styles adopted by the leaders of the two MNCs selected in
leading, managing, and controlling the operations of the MNC. In the case of Maybank, the
leaders of the Group has resorted to a more transformational approach in their leadership
style by encouraging openness in communication and employee engagement. Effective two-
way communication between the Group’s leaders and the employees becomes an integral
element pursued by the leaders of Maybank through various platforms and channels
implemented to encourage employees to speak up. Not only that, the leadership style adopted
by Maybank leaders also is one that break through the traditional hierarchical structure of
MNC by establishing a more horizontal organizational structure characterize by fewer layers
of bureaucracy in accordance with the transformational approach.

Not only that, the leaders of Maybank also encouraged their employees to pursue their
desires and passion in an attempt to help them achieve their need for self-actualization under
the Maslow’s hierarchy of needs. The leaders provide appropriate platform and channel
which supports the employees’ passion which then led to better productivity and more
engaged workforces. Not only that, Maybank leaders also strive to increase employees
engagement by providing them with sufficient opportunities to voice out their opinions and
ideas in an attempt to align their employees’ vision with that of the Group. In short, Maybank
leaders have adopted a leadership style which facilitates changes among the employees of the
Group to drive higher level of productivity and efficiency.

In contrast with Maybank, Samsung leaders on the other hand have adopted
transactional and authoritarian approach towards leadership. Under the transactional
approach, the leaders of Samsung have formulated and implemented a reward and
compensation system that is based upon the performance level of the employees. Under this
approach to leadership, employees are rewarded when their performances bring profits to the
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company and will be punished if they failed to do so. This performance-based reward system
closely resembled the transactional approach to leadership which revolves around the
exchange of reward and punishment between leaders and their followers.

Authoritarian approach to leadership is apparent among Samsung leaders in view of

the large power distance that exists between the leaders and their employees. This large
power distance has separated the top management of the company from their lower-level
employees thus making two-way communication between these two parties difficult and
seemingly impossible. Rigid vertical hierarchical structure used by the leaders also closely
resembles the authoritarian style of leadership whereby each and everyone in the organization
are bound to their own tasks and responsibilities and are not allowed to overstep their rank
boundaries. Employees in lower-level are not given enough opportunity and medium to
engage in a two-way communication with the leaders considering the many layers of
bureaucracy that exist within the organizational structure.

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