Transformational and transactional leadership in B2B sales: A cultural comparison between Austria and China

Abstract

Good leadership is a cornerstone of every successful company. The optimal leadership approach can vary from culture to culture and from country to country. This bachelor thesis examines two leadership styles: transactional and transformational leadership. The goal of this bachelor thesis is to determine which of the two leadership styles, transactional or transformational, is more suitable for each culture and how each should be applied in their respective B2B sales settings. In order to determine this, a literature review was first carried out, followed by empirical research in which qualitative interviews were conducted. The literature review consisted of two main parts, leadership and cultural dimensions. Transactional leadership, which relies on rewards and punishments, and transformational leadership, which focuses on empowering employees, were examined. In sales, transformational leadership positively influences team performance, although a mix of both styles is often applied. The cultural dimensions of Austria and China were compared using Hofstede's and the GLOBE project's frameworks. Austria has low Power Distance, high individualism, and high uncertainty avoidance, while China has high Power Distance, collectivism, and low uncertainty avoidance. The outcomes of the empirical research revealed several cultural influences on leadership styles in Austrian and Chinese B2B sales settings. In Austria, transformational leadership is preferred due to its alignment with creative, independent, and extroverted salespeople, supported by flatter hierarchies and passive control. Conversely, in China, transactional leadership is more prevalent, driven by the importance of bonuses, hierarchical structures, and active management. Despite a growing popularity for transformational leadership in China, transactional elements remain dominant. Both cultures benefit from a mix of transactional and transformational leadership, tailored to their specific cultural dimensions, with Austria emphasizing transformational components and passive management, while China focuses on contingent rewards and active management.

Date of Award	2024
Original language	English
Supervisor	Robert Füreder (Supervisor)