and procedures, decides what goals are to be achieved, and directs and controls all activities without any meaningful participation by the subordinates.” Autocratic leaders focus on obtaining short-term efficiency, rather than having a vision or strategy for the future( De Aguirre). Their authority comes mainly from the position giving to them within the company; thus, they are very“ status conscious”.
On the other hand, we have the paternalistic style of leadership, which the Business Dictionary defines as“ A type of fatherly managerial style, typically employed by dominant males where their organizational power is used to control and protect subordinate staff” This style is easily seeing in small and medium businesses, which is the majority in Guatemala. Paternalistic leaders are very emotional when dealing with employee’ s issues; thus, the working environment may become tense and competitive since inequality and favoritism tends to emerge. They look forward to establish a strong bond with their subordinates and gain their trust, which is why they value the views of their workers and pay attention to their social needs. Overall, attaining efficiency in a business with a paternalistic leader becomes a challenge due to their personal attachment to it and the lack of innovation when it comes to new managerial techniques( De Aguirre).
It is important to note that Guatemalans acknowledges the need to create new types of leaders; it is understandable that neither autocratic nor paternalistic leaders truly satisfy their expectations of how“ true” leaders should be. Guatemalans consider that applying the democratic leadership style, in which leaders and followers collaborate in the decision-making process, is the most likely solution. However, accomplishing this will be very challenging for this country considering that their current political leaders are working in a government system that is considered halfauthoritarian and half-democratic, which gives a
8 | L A T I T U D E 0 4 / 0 1 / 2013 feeling of uncertainty and political instability( Fuentes).
MANAGEMENT: SMB IN GUATEMALA
Guatemala’ s economy is highly influenced by its informal sector. According to the Center of National Economic Investigations, 95 % of the businesses in Guatemala are micro-companies. This large percentage shows that small and medium businesses( SMB), located both in rural and urban areas, have become the trend after the crisis of 1979 – 1985( Walter and Rosales). As seeing in the following chart, the majority of these businesses do not have many employees, which leave us to wonder, what is the business management style in Guatemala?
First, I think we take a look at the structure of the businesses in Guatemala and the way they are organized. Most of the companies in this country have an autocratic hierarchical organization( Intercultural Management). This means that companies have a strict vertical structure in which the decisions or orders flow from top( CEO or owner) to bottom( subordinates). Each layer or departments of the organization tend to concentrate on achieving their functional goals and not necessarily the general goals of the company. Crossfunctionality is not much likely to occur since all divisions of a company tend to work as functional silos.
Taking in consideration that the organizations in Guatemala follow a hierarchical structure, it is no surprise that managers in this country are autocratic- more so than in other countries of the region. When it comes to decision making, there is no such thing as consensus or having open discussions about it, since all the orders are given by the top managers and decisions are taken in a centralized way. Employees need to be careful as to whom and how they express their ideas about a decision or initiative taken, since hurting egos or challenging someone ' s authority can be dangerous( Cultural Information). One of the key tools for a manager to succeed in the