**1. Introduction**

Leadership is a decisive factor for growth, when seen as the capacity to lead ourselves and others [1]. In recent years leadership development has taken on far greater importance [2–4], highlighting a growing interest in self-concept or identity in leadership [5]. Identity is defined as the culmination of an individual's values, experiences and self-perceptions [6]. Despite its importance, very few empirical studies have combined the effect of an individual's values, experience and attitudes on the ability to lead, and even fewer studies have attempted to address this effect in different development contexts [7, 8]. Bass and Bass [9] point out the need to pay more

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2018 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

attention to promoting and encouraging more empirical studies on leadership across cultures, considering differences in institutions, national styles, culture and performance.

struals (e.g. [23, 24]), leader behavior (e.g. [25]), relationships between leader behavior and behavioral consequences (e.g. [23]), and so forth. Evidence also indicates that leadership is associated with cultures and countries in unique combinations [8]. Alvesson and Willmott [26] argue that identity is actively created by the environment. The importance of the context

Informal Institutions and Leadership Behavior: A Cross-Country Analysis

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Various theories and methods of institutional analysis are used in the different branches of the social sciences [27]. A basic premise in research on international management is that organizations are embedded in country-specific institutional arrangements that differ from country to country [28]. Leadership and management have rarely been associated with the institutional approach, however, although some of its roots are related to this perspective [29]. Drucker's earliest managerial work discusses the emergence and the importance of management as an institution [30]. Drucker recognizes the role of informal institutions as cultures, practices and values. We consider it appropriate to address this research from an institutional perspective in the light of this literature. North ([11]: 3) proposed that "institutions are the rules of the game in a society, or more formally, institutions are the humanly devised constraints that shape human interaction." Institutions can be either formal (such as political rules, economic rules and contracts) or informal (such as codes of conduct, attitudes, values, norms of behavior and conventions), reflecting the culture of a society. In this sense, "informal institutions are a part of the heritage that we call culture" ([11]: 37). Informal institutions change very slowly compared with formal institutions [31]. The values that a person is committed to are deeply rooted in their social and the sociocultural background [32]. Given the importance of culture in defining the identity of, and the aspiration to be a leader, the focus of this study based on

in the construction of identity is of great importance in leadership [7].

North [11, 12] is the informal institutions that affect leadership across countries.

adequate structure for the socio-emotional roots of leadership [35, 40].

Recent findings suggest small but significant relationships between values, attitudes, cognitive ability with leadership emergence and effectiveness [33–37] with leadership styles [37] and also with exceptional global leadership [38]. In this chapter, we focus on tolerance, social capital, creativity, power and responsibility as informal institutions that influence the determination to be a leader. These informal institutions have been included in important leadership studies and culture studies, such as the World Values Survey and Schwartz Value Survey, and have also been related in the Big Five personality model [39], which provided an

The extant literature shows that tolerance is associated with managerial effectiveness [9]. Effective problem solving requires an ability to remain calm and stay focused on a problem. In addition to making better decisions, a leader with high tolerance is more likely to stay calm and provide confidence [14]. The opposite of this variable is neuroticism, in the Big Five factors structure of personality, and this has been positively correlated with anxiety and negatively correlated with leadership effectiveness [35]. Tolerance is especially important for executives who must deal with adverse situations. Kajs and McCollum [41] summarized the relationship between a tolerance of ambiguity and various positive leadership behaviors. The major characteristics displayed by

**2.1. Informal institutions and leadership**

*2.1.1. Tolerance and leadership*

Hence, this chapter empirically examines the influence of informal institutions on leadership, and especially on self-leadership. We use institutional economics [10, 11], focusing on the sociocultural approach that captures the influence of attitudes, values and norms on human behavior. The set of hypotheses proposed are assessed through a panel data model, which uses information from the World Values Surveys, International Monetary Fund and the World Bank. Throughout a sample of 67 observations from 35 countries in two waves (5-2005- 2008 and 6-2010-2012), we find that tolerance, creativity, social capital and responsibility have a positive effect on leadership behavior, whereas greater power affects negatively leadership. This study contributes theoretically by extending the domain of institutional economics to the field of leadership behavior. Additionally, other managerial implications can be derived from our results. In this regard, firms and society might be interested in fostering features such networks cohesion, diversity and tolerance, creativity and responsibly managed ambitious.

Apart from this introduction, the chapter begins by discussing the relationship between institutions and leadership. The chapter then provides information on the data and our analytical approach. Results are presented for a series of models where informal institutions are the key independent variables. Finally, the conclusions consider the implications of our findings, discus potential limitations and suggest some areas for further research.
