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Cross-Cultural Leadership: Goal Interdependence and Leader-Member Relations in Foreign Ventures in China
Yi Feng Chen
Department of Management, Lingnan University, Hong Kong
(852)2616-8308, Fax (852)2467-0982
Email: [email protected]
and
Dean Tjosvold
Department of Management, Lingnan University, Hong Kong
(852)2616-8324, Fax (852)2467-0982
Email: [email protected]
September, 2004
Note: This work has been supported by the Research Grants Council of the Hong Kong Special Administrative Region, China, (Project No: LU3013/01H) to the second author.
Abstract
Cross-cultural leadership may be particularly challenging, as there are
significant barriers to developing an effective relationship between managers and
employees. Two hundred and thirty Chinese employees from various industries in
Chinese Mainland were surveyed on their relationship with their American, Asian,
and Chinese managers. Results, including structural equation analyses, support the
hypotheses that cooperative, but not competitive or independent, goals help
employees and their foreign managers develop a quality leader-member exchange
relationship, which in turn improve leader effectiveness, employee commitment, and
future collaboration. Cooperative goals may be an important way to overcome
obstacles and develop an effective leader relationship within and across cultural
boundaries.
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Cross-Cultural Leadership: Goal Interdependence and Leader-Member Relations in Foreign Ventures in China
China has become the largest receiver of foreign direct investment (FDI)
during the first years of the twenty-first century (UNCTAD, 2002). Many companies
are developing subsidiaries and joint ventures in China to lower costs and participate
in the global marketplace. Long-term success in China depends on the recruitment
and retention of a local workforce (National Foreign Trade Council and Towers Perrin,
1998). To make these organizations effective, multi-national managers must
successfully lead local employees. The relationship between managers and employees
has been considered critical for effective leadership, especially in collectivist Asia
(Brower, Schoorman, and Tan, 2000; Graen and Uhl-Bien, 1995; House, Wright, and
Aditya, 1997; Hui and Law, 1999; Setton, Bennett, and Liden, 1996; Schriesheim,
Neider, and Scandura, 1998; Uhl-Bien and Maslyn, 2000).
However, researchers have found that a manager’s culture strongly influences
his/her attitude and behavior (Mason and Spich, 1987). Developing an effective
relationship between managers and employees is difficult, especially when they have
diverse cultures. An action that appears very reasonable to the manager can appear
biased, illogical, and unfair when viewed from the perspective of an employee from
another culture (Adler, 2002). Cross-culture researchers have recently argued for the
need to develop frameworks that can help diverse people overcome obstacles and
work together effectively (Bond, 2003; Smith, 2003). However, few studies have
documented ways to promote effective cross-cultural leadership.
To fill this gap, this study investigates the proposition that cooperative, rather
than competitive and independent, goals promote a high quality leader-member
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exchange (LMX) between foreign managers and Chinese employees. This
relationship, in turn, facilitates leader effectiveness, employee commitment, and
future collaboration between foreign managers and Chinese employees.
In addition to exploring ways to promote effective cross-cultural leadership in
Chinese contexts, this study contributes to the existing literature by empirically
documenting the utility of universal theories (namely the theory of cooperation and
competition and the theory of leader-member exchange), to our understanding of
cross-cultural leadership. It is a cross-cultural study of American managers and
Chinese employees as well as a study of LMX relationships between managers and
employees in a Chinese context.
Theory of Leader-Member Exchange
The leader-member exchange theory proposes that the quality of the
relationship between a leader and individual employees determines leader
effectiveness (Graen and Uhl-Bien, 1995). Graen and his colleagues (e.g. Dansereau,
et al., 1975; Graen and Schiemann, 1987; Liden and Graen, 1980) suggest that
because of constraints of limited time and energy, leaders develop close relationships
with a few subordinates and share their personal and positional resources to help these
employees perform. Leaders tend to develop and maintain LMXs with their
subordinates that vary in quality, ranging from in-group to out-group. In-group
exchange is a high quality relationship characterized by high levels of information,
communication, mutual support, informal influence, trust and negotiating latitude. On
the other hand, out-group exchange is a low quality relationship characterized by
mistrust, formal supervision, little support and attention.
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Research also indicates that LMX very much affects discourse patterns
(Fairhurst, 1993; Fairhurst, et al., 1987), persuasion strategies (Krone, 1992),
conversational resources, i.e., interpretive and conversational procedures, (Fairhurst
and Chandler, 1989), and relational maintenance (Waldron, 1991). Studies suggest
that high quality LMX relationships contribute to organizational citizenship behavior
where employees perform useful tasks even though they are not prescribed by their
roles (Bauer and Green, 1996; Boyd and Taylor, 1998; Deluga, 1998; Duarte, et al.,
1994; Gerstner and Day, 1997; Graen and Uhl-Bien, 1995; Howell and Hall-merenda,
1999; Setton, et al., 1996).
In addition to research in the West documenting the value of quality LMX
relationships (Boyd and Taylor, 1998; Deluga, 1998; Gerstner and Day, 1997; Gersick,
Bartunek and Dutton, 2000; Howell and Hall-Merenda, 1999), quality relationships
have been found useful in collectivist China (Hui and Law, 1999). Wakabayashi and
Graen (1984,1988) also argued that recently hired Japanese employees who had
developed high quality LMX with their immediate supervisors were positioned as
in-group members that made them central to the management system. In contrast,
those who had failed to develop high quality LMX were positioned as out-group
members and outside the core of the management system. The quality of the vertical
dyad exchange was found to have a major impact on motivating newcomers to work,
mentoring their behavior toward the attainment of career goals, and contributing to
their promotion and bonus.
These studies suggest that LMX theory is useful both in Western and Eastern
contexts. However, evidence is needed in such settings as joint ventures in China to
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test its usefulness directly in the situation where managers and employees have
different cultures.
Cross-Culture Leadership
In highlighting the human resource implications of cultural differences,
researchers have argued that the most common cross-culture management challenge is
to facilitate how culturally diverse people work together (Adler, 1983; Adler et al.,
1986; Child, 1994; Shaw and Meier, 1993; Cox and Blake, 1991). Managing
culturally diverse people so that they work as a team requires special skills and
sensitivities (Abrahamson and Lane, 1990; Earley, 1987; Shenkar and Zeira, 1987,
1990). Effective management of culturally diverse labor forces and maintaining good
relationships very much contribute to the success of joint ventures.
Following the seminal work of Hofstede (1980, 1991), researchers have
argued that individualism and collectivism cultural values distinguish societies
(Earley and Gibson, 1998; Erez and Earley, 1993; Hofstede, 1980, 1991, 1994;
Triandis, 1989, 1990, 1994, 1995, 1998, 2000). Individualism and collectivism are
social patterns that define cultural syndromes (Earley and Gibson, 1998; Hofstede,
1980, 1991; Triandis, 1994, 1995, 1998), which are shared patterns of beliefs,
attitudes, norms, and values organized as one theme. Some countries are clearly more
individualistic than other countries. As defined by Chatman and Flynn (2001),
individualism is a social pattern that individuals view themselves as independent and
motivated by their own preferences, needs, rights, and contracts. In contrast,
collectivism is a social pattern in which individuals regard themselves as belonging to
one or more collectives (e.g., family, coworkers, groups, organizations, tribe) and
motivated by norms, duties, and obligations that are imposed by collectives. These
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differences have been found to interfere with collaboration across cultures (Wang, et
al., 2000).
When people from collectivist and individualistic cultures work together, they
are likely to experience misunderstandings and frustrations and have different logical
reasoning and preferences for how they should discuss issues (Adler, 1986; Hofstede,
1980; Swierczek and Hirsch, 1994; Herbig and Gulbro, 1997). In particular, the
collectivist Chinese are often thought to be conforming and submissive in that they
want to avoid face-to-face confrontation, while individualistic Westerners are
characterized as favoring direct give-and-take collaboration (Tang and Kirkbridge,
1986). Chinese seem to have at least somewhat more negative attitudes and
orientation toward conflict than Westerners (Tjosvold and Wong, 1992) and tend to
avoid face-to-face confrontation (Bond, et al., 1985), evade conflicts with strangers,
and short-circuit or smooth over open conflicts (Chiao, 1981). In the failure of Beijing
Jeep, Western managers criticized their Chinese partners but the Chinese managers
could not regard these complaints reasonable (Mann, 1989).
However, there might be fewer difficulties when Chinese employees
collaborate with other Asian leaders who share similar cultural orientations. A
previous study found that despite the history of rivalry and hostility, when Japanese
leaders and Chinese employees developed collectivist values in their relationships,
they were able to collaborate open-mindedly and build a trusting relationship (Liu,
Tjosvold, and Wang, 2004).
In spite of the confirmation of the difficulties and challenges in cross-culture
management, few studies suggest how to facilitate cross-cultural interaction (Smith,
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2003). Our present study explores how to enhance effective interaction between
foreign managers and their Chinese employees. It proposes that the theory of
cooperation and competition suggests major conditions that affect whether foreign
managers and local employees develop quality LMX relationships.
Theory of Cooperation and Competition
Deutsch (1949, 1973) theorized that how people believe their goals to be
related greatly affects the dynamics and consequences of their relationship. The basic
premise of the theory of cooperation and competition is that the way goals are
structured determines how individuals interact, and their interaction determines the
outcome (Deutsch, 1949, 1973; Johnson and Johnson, 1989).
In cooperation, goals are considered positively related. People pursue a
common vision and shared rewards, so that the success of one helps others succeed.
They believe when others move toward goal attainment, they also move toward their
goals; others’ goal attainment promotes their success. In belief that their goals are
compatible, people discuss opposing positions open-mindedly, and try to integrate
their ideas, and work for a mutually acceptable solution, that in turn results in
high-quality solutions to problems and productive work (Deutsch, 1973; Tjosvold,
1989).
In competition, goals are believed to be negatively related. People pursue
win-lose rewards, believing others’ goal attainment interferes with their success.
People believe that the more others achieve, the less likely they can get what they
want. In the belief that their goals are incompatible, they try to mislead and hold
others back as they want to “win”.
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In independence, goals are considered unrelated. People conclude that whether
they can succeed depends on their own effort. As the goal attainments of others have
no impact on their achievement, they pursue their goals individually.
Studies have specifically documented that managers with considerable ability
to assist employees do so especially when they had cooperative goals (Liu et al.,2004).
Managers with cooperative goals provided support and assistance and developed
trusting and friendly attitudes (Tjosvold, 1991). By promoting an open-minded
discussion of views, cooperative goals have been found to result in mutual solutions
to problems (especially complex ones), and confidence in working together (Alper, et
al., 1998; Johnson and Johnson, 1989). On the other hand, competitive goals have
been found to be associated with frustration, and result in fragmented relationships
and low performance, except on some simple tasks (Stanne, Johnson and Johnson,
1999).
However, only a few studies to date have explored how cooperative goals
affect LMX relationships between people from different countries in a Chinese
context. This research suggests that developing a high quality LMX relationship based
on cooperative goals between managers and employees with different cultural
backgrounds promotes successful interaction and contributes to organizations.
Overall, this study tests the role of cooperative goals on LMX relationships
between foreign managers and Chinese employees. Cooperative goals between
Chinese employees and their American managers are expected to strengthen their
LMX relationship and contribute to leader effectiveness, employee commitment to the
9
organization, and future collaboration. Competitive and independent goals are
expected to weaken their LMX relationship.
------------------------------- Insert Figure 1 about here -------------------------------
Hypothesis 1: The goal interdependence between American managers and
Chinese employees affects the quality of their LMX
relationships.
H1a: American managers and Chinese employees with cooperative
goals have a high quality LMX relationship.
H1b: American managers and Chinese employees with competitive
goals have a low quality LMX relationship.
H1c: American managers and Chinese employees with independent
goals have a low quality LMX relationship.
Hypothesis 2: Chinese employees with a high quality LMX relationship with
their American managers view their manager as effective
leaders.
Hypothesis 3: Chinese employees with a high quality LMX relationship with
their American managers are committed and want to
collaborate with their American managers in the future.
Culture Differences
Chinese people, as collectivists, might value interdependence among their
in-group members, and might generally find it easier to work cooperatively and
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constructively with Asian managers who are also collectivists and generally share
their cultural background and relationships (Ohbuchi, et al, 2001). Although no
hypotheses are proposed, the design of this study allows exploring differences
between how Chinese employees regard their relationships with Chinese, Asian, and
American managers.
It was hypothesized that cooperative goals strengthen the LMX relationship
between Chinese employees and Asian and Chinese managers as well as between
Chinese employees and American managers. We tested the hypotheses relating goal
interdependence to LMX and then LMX to employee commitment and future
collaboration of Chinese employees with other Asian and Chinese managers.
The effects of goal interdependence are expected to occur with managers from
different cultures. Hypotheses 4, 5 and 6 as well as Hypotheses7, 8 and 9 are similar
to Hypotheses 1, 2 and 3, except that they are for Chinese employees with Asian
managers and Chinese employees with Chinese managers.
METHOD
Participants
Respondents from foreign-owned ventures, located in different provinces in
Chinese Mainland, were invited to participate in the study. Each respondent had
worked with their foreign managers for at least six months so that they could report
on an on-going relationship. To reduce potential concern for being involved in
evaluating others, participants were told that their responses would be kept totally
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confidential and would be used for research only. Top and middle management of the
companies supported their participation.
We distributed 350 copies of the questionnaire and 230 were completed. The
participants were based in different industries: 56 were in IT and telecommunications,
51 were in manufacturing, 32 were in health care, consultant and social welfare, 31
were in education, culture, art, broadcasting, news center; 21 were in wholesale, retail
and catering; 12 were in the finance sector, 11 were in social services, 9 were in
transportation, storage, and 7 were in other industries. The participants had various
positions in their companies: 63 were engineers, 36 of the participants were managers
at a beginning level, 24 were executive assistants, 23 were middle managers, 19were
accountants and finance specialists, 19 were consultants, 18 were secretaries and
office clerks, 12 were salesmen, and 16 had other positions.
Among the questionnaires returned, 68 copies were completed by employees
with American managers, 95 by employees with local Chinese managers, 43 by
employees with Hong Kong and Taiwan managers, and 24 by those with Japanese
managers. As Hong Kong, Taiwan and Japan are all considered to have collectivistic
cultures (Hofstede, 2001), we group these 67 copies into those who had Asian,
non-local managers.
Of all the respondents, 126 were male; their average age was 28.6, and 177
had worked with their managers for more than one year; 129 had a bachelor’s degree
and 59had a master’s degree or a doctorate. For the group whose managers were
American, 35 were male; and 50 had worked with their managers for more than one
year; 50 had a bachelor’s degree and 15 had a master’s degree or a doctorate. For the
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group whose managers were non-Chinese Asian, 34 were male, and 52 had worked
with their managers for more than one year; 29 had a bachelor’s degree and 16had a
master’s degree or a doctorate. For the group whose managers were Chinese, 54 were
male, and 74 had worked with their managers for more than one year; 59 had a
bachelor’s degree and 21 had a master’s degree or a doctorate.
Goal Interdependence
Scales for cooperative and competitive goal interdependence were developed
from previous questionnaire studies conducted in China and North America (Tjosvold,
1995; Tjosvold, Andrews and Struthers, 1990; Liu et al.,2004). The five items for
cooperation measured their common goals, common tasks and common benefits. A
sample item for the cooperative goal scale is “My manager and I share common
goals”. (Appendix has the items for all the scales.) The four competitive scale items
measured the incompatibility of goals, tasks, and rewards. A sample item is “What
helps me gets in my manager’s way”. The five independent scale items measured the
independence of goals, tasks and benefits. A sample item is “Both my manager and I
do our own thing”. Participants were required to rate on 5-point scales (from
1=strongly disagree to 5=strongly agree) their level of agreement to the items.
The scales demonstrated acceptable reliability, although the competitive scale
was below .70. For Western managers, the coefficient alphas for the cooperative,
competitive and independent goal scales were .85, .60, .82, and for Asian managers,
the coefficient alphas were .74, .71, .84, and for Chinese managers, the coefficient
alphas were .83, .64, .84, respectively.
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LMX relationship
The scale on LMX relationship was taken from LMX research (Fairhurst et al.,
1987; Fairhurst and Chandler, 1989). The five items measured whether or not the
LMX relationship was high quality. A sample item is “My manager and I are inclined
to pool our available resources to solve the problems in my work”. Respondents were
required to rate on a 5-point scale (1=strong disagree, 5=strongly agree) their level of
agreement to the five items.
The scale demonstrated acceptable reliability. For American managers, the
coefficient alpha was .83; for Asian managers, .75; and for Chinese managers, .84.
Leader Effectiveness, Commitment and Future Collaboration
Scales for the outcome measures were developed from previous research. A
3-item scale was used to measure leader effectiveness (Liu et al., 2004). A sample
item is “My manager performs his leader roles appropriately”. A 3-item scale was
used to measure the extent to which respondents describe their commitment to their
organization (Tjosvold and Sasaki, 1998). A sample item is “I have a strong sense of
belonging to my company”.
A 3-item scale measured the extent to which the partners were willing to work
together in the future (Tjosvold and Andrews, 1991). A sample item is “I hope I can
work with my manager in the future”. Respondents were required to rate on a
5-point scale (from 1=strongly disagree to 5=strongly agree) their level of agreement
to the statements.
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The scales demonstrated acceptable reliability based on coefficient alphas. For
American managers, the coefficient alphas for leader effectiveness, employees’
commitment and future collaboration were .91, .87, .85. For Asian managers, the
coefficient alphas were .83, .88, .83. For Chinese managers, the coefficient alphas
were .89, .89, .87.
Questionnaire Translation and Pilot Test
Questionnaires originally written in English were translated into Chinese, then
checked by being translated back into English to ensure conceptual consistency. The
translation and back-translation were undertaken by bilingual researchers who had
studied in both Chinese and English, thus sufficiently educated in both languages as
recommended by Bracken and Barona (1991).
The original questionnaire was first translated into Chinese by one researcher
and translated back into English by another independent researcher as described by
Brislin (1970) and Chapman and Carter (1979). The translator and back-translator met
with the English speaking, monolingual researchers to examine the differences found
in the back-translation. After considering their suggestions, some necessary
modifications were made, completing the Chinese version of the questionnaire.
The first version of the questionnaire was pre-tested to make sure that every
question was stated appropriately so that respondents could clearly understand every
concept and question. The pilot-test was conducted among 40 employees (20 male
and 20 female) in a multinational company in Shanghai. Based on their feedback, a
few questions were rephrased for clarity, then, the final version was ready for data
collection. All the items for the seven scales are shown in the appendix.
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Factor Analysis and Confirmatory Factor Analysis of the Constructs
Although the scales were taken from previous studies, they were developed in
the West where organizational forms and work values might not be very similar to
those in China. Therefore, factor analyses were conducted. We first conducted a
factor analysis to test whether all the items under the same scale loaded on a “single”
factor. Most of the items loadings are higher than .7, with the lowest being .67,
suggesting that the measures are uni-dimensional. Then, we conducted a series of
confirmatory factor analyses (CFA) to examine whether the employees’ ratings would
load on seven distinct factors: cooperative, competitive, independent goals, LMX,
leader effectiveness, employee commitment and future collaboration.
The CFA were conducted using EQS for Windows 5.7 b, following the
common approach in the literature using structural equation analysis (Mathieu and
Farr, 1991; Mathieu, Hofmann and Farr, 1993). We combined two constructs in a
series of CFA and compared the reduced model to the baseline model. The two
constructs were combined when they were found to be highly correlated. A significant
difference in chi-square would indicate that the reduced model is significantly worse,
meaning that respondents could distinguish these two constructs.
Table 2 shows the results of these series of CFA. For Chinese employees
with Western managers, Model M0 in Table 2 shows that our proposed 7-factor
model fits the data extremely well with the CFI of .89 and the NFI of .93. This
7-factor model was then tested against the three different 6-factor models. Merging
two of the seven factors into one aggregate factor formed each of these 6-factor
models. Degree of freedom decreased but model chi-square increased when we
moved from the 7-factor model to any of the six 6-factor models. CFI and NFI of the
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original 7-factor model are .89 and .93, while CFI and NFI of the 6-factor models had
marginal fits < .70. For Chinese employees with Asian managers and Chinese
employees with Chinese managers, similar results existed when we compared the
7-factor models with the 6-factor models. Given the support from the series of CFA,
we concluded that the 7-factors are distinct measures of the constructs in our study.
Hypotheses Testing
We first used within-and-between group analysis to test whether the different
industries that participants were from had effects on the results. We divided all the
participants into six sub-groups according to their industries. Results showed that
there were no significant differences between participants from different industries on
the study’s measures.
Correlation analysis was used to test the hypotheses linking goal independence,
LMX relationship, and outcomes. To probe the theory more vigorously, structural
equation analysis was used to explore the underlying relationship among goal
independence, LMX relationship and outcomes. The covariance structure analysis
among these constructs was analyzed using EQS for Windows (Bentler and Wu,
1995).
Following the hypotheses, the interdependent goals--cooperation, competition
and independence--were specified as exogenous variables. These three goals would
affect LMX which in turn might affect leader effectiveness, commitment, and future
collaboration. The proposed Mediating Effects model was compared to the Direct
Effects model. The Direct Effects model posited that goal interdependence impacts
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outcomes directly whereas the Mediating Effects model proposes that the LMX
relationship mediates between goal interdependence and outcomes.
RESULTS
We used correlation analysis on the seven variables of cooperative,
competitive, and independent goals, LMX relationship, leader effectiveness,
commitment, and future collaboration. Correlations among the scales support the
overall framework that how the goals of leaders and Chinese employees are structured
affects the LMX relationship and outcomes. (Table 1)
Results support H1 in that Chinese employees indicated that they and their
American managers had a good LMX relationship to the extent that they had
cooperative goals (r= .46, p< .01). In contrast, employees with competitive goals as
well as independent goals with their American managers reported low levels of LMX
relationship (r=-.34, p<.01; r=-.40, p<.01). Results support H2 and H3 in that Chinese
employees who reported a high LMX relationship also rated their American managers
effective (r= .70, p<.01), their own commitment to the organization high (r= .41,
p<.01), and they looked forward to future collaboration (r= .56, p<.01).
Similar relationships among variables were expected for Chinese employees
and their Asian managers, and Chinese employees and their Chinese managers.
Results largely support these propositions. Consistent with H4, Chinese employees
with cooperative goals indicated that they had a quality LMX relationship with their
Asian managers (r= .27, p<.01), whereas those with competitive (r=-.15, p<.05 ) and
independent (r=-.35, p<.01 ) goals indicated low levels of LMX relationships.
Consistent with H7, Chinese employees with cooperative goals indicated that they had
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a high LMX relationship with their Chinese managers (r= .51, p<.01), whereas those
with competitive (r=-.37, p<.01 ) and independent (r=-.48, p<.01 ) goals indicated low
levels of LMX relationships.
Results provide support for H5 and H8 in that Chinese employees with a high
LMX viewed their Asian managers as effective leaders (r= .71, p<.01) and also
viewed their Chinese managers as effective leaders (r= .51, p<.01 ). Results also
support H6 and H9 in that Chinese employees with high LMX with their Asian
managers were committed (r= .59, p<.01 ), and desired future collaboration (r= .53,
p<.01); employees were committed (r= .50, p<.01 ) and wanted future collaboration
(r= .48, p<.01) when they had high LMX with their Chinese managers.
------------------------------ Insert Table 1 about here ------------------------------
Structural equation analyses through EQS were used to explore the
relationship between goal independence, LMX relationship, and the outcomes of
effectiveness, commitment to the organization and future collaboration. Tables 3, 4
and 5 show the path estimates for the models tested in the study.
The fit statistics indicate that the hypothesized model statistics fits the data
well (Table 2, 3, 4). We compared the Mediating model--our hypothesized model--to
the saturated models and the Direct Effects models. The χ2 of the Mediating Effects
model was χ2 =22.03 (d.f.=9, p<.01 ) for American managers and χ2 = 24.23 (d.f.=9,
p<.01 ) for Asian managers, and χ2 =30.13 (d.f.=9, p< .01) for Chinese managers. The
difference of χ2 between the Mediating Effect model and the Direct Effects model
were significant (χ2 difference = 31.51, 68.48 and 144.66 for American managers,
Asian managers and Chinese managers respectively), indicating that omission of the
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mediating effects of LMX significantly deteriorated the Mediating Effects model.
Results of the causal model comparison suggest that the Mediating Effects model be
accepted for American, Asian and Chinese managers’ data.
The path coefficients of the theorized model help to explore the findings more
specifically (Tables 3, 4 and 5). Regardless of the manager’s culture, results indicate
that cooperative goals (for American managers β=.36, p<.01, for Asian managers
β=.18, p<.05, and for Chinese managers β=.43, p<.01) had positive and significant
effects on LMX relationships. However, competitive (for American managers β= -.13,
p=.ns, for Asian managers β= -.19, p=ns, and for Chinese managers β= -.06, p<.ns)
and independent (for American managers β= -.22, p=ns, for Asian managers β= -.43,
p<.05, and for Chinese managers β= -.27, p<.05) goals did not always have
statistically significant negative effects on LMX. On the other hand, LMX
relationships had significant positive effects on leader effectiveness (for American
managers β= .67, p<.01, for Asian managers β= .71, p<.01, and for Chinese managers
β= .51, p<.01), employee commitment (for American managers β= .41, p<.01, for
Asian managers β= .59, p<.01, and for Chinese managers β=.50, p<.01), and future
collaboration (for American managers β= .56, p<.01, for Asian managers β= .53,
p<.01, and for Chinese managers β= .48, p<.01). These findings on path coefficients
provide generally good support for the study’s hypotheses.
In regards to model fit, the Mediating Effects model had a model chi-square of
22.03 and degree of freedom was 9 for the American managers’ data, 24.23 and 9 for
the Asian managers’ data, and 30.13 and 9 for the Chinese managers’ data. The NFI
and CFI for the model were .89 and .93 for the American managers’ data, .89 and .92
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for the Asian managers’ data, and .92 and .94 for the Chinese managers’ data. Both
fit indices were considered to indicate good model fit for all these three group data.
-------------------------------------------------------- Insert Table 3, Table 4 and Table 5 about here --------------------------------------------------------
Cultural Differences
We also conducted t test analyses regarding Chinese employees’ reporting of
goal interdependence with managers from different countries. Results (Table 6)
indicated that there were no significant differences among employees’ rating of their
goals and LMX relationships with managers from different countries.
Analyses did, however, reveal differences in the outcome measures. Findings
suggested that Chinese employees considered their Asian managers more effective
than American managers (American managers, M= 2.45, Asian managers, M=3.06,
t=-3.45, p<.01). They also considered their Asian managers more effective than
Chinese ones (Asian managers, M= 3.06, Chinese managers, M=2.74, t=2.61, p<.01)
and Chinese managers more effective than American managers (American managers,
M= 2.54, Chinese managers, M=2.74, t=1.52, p<.01)
Results also indicated that Chinese employees had, in comparison to American
managers, more commitment to Asian managers (American managers, M=3.41, Asian
managers, M=3.85, t=-3.31, p<.01) and to Chinese managers (American managers,
M= 3.41, Chinese managers, M=3.67, t=-1.96, p<.01). However, there is no
significant difference in their commitment when they work with non-Chinese Asian
managers than with Chinese managers (Asian managers, M= 3.85, Chinese managers,
M=3.67, t=2.61, p=ns).
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Results of t-tests also suggested that in comparison to American managers,
Chinese employees looked forward to future collaboration with Asian managers
(American managers, M=3.31, Asian managers, M=3.78, t=-3.45, p<.01) and with
Chinese managers (American managers, M= 3.41, Chinese managers, M=3.52,
t=-1.96, p<.01). They also wanted to work with non-Chinese Asian managers more
than Chinese managers (Asian managers, M= 3.78, Chinese managers, M=3.52,
t=2.15, p<.01).
------------------------------- Insert Table 6 about here -------------------------------
DISCUSSION
Previous research has emphasized the value of relationships between
managers and employees for leadership and the difficulties of forming such
relationships, especially across cultural boundaries (Brower, et al., 2000; Graen and
Uhl-Bien, 1995; House, Wright and Aditya, 1997; Hui and Law, 1999). Results of our
study support the theorizing that the quality of the relationships between managers
and employees affects employee performance and leadership effectiveness, and
extend this theorizing to cross-cultural settings. Findings emphasize that quality LMX
relationships between managers and employees are a foundation for effective
leadership and employee commitment to the organization in foreign ventures
operating in China.
In addition to supporting the theorizing that cooperative goals can enhance
LMX relationships and extend it to cross-cultural settings, results directly contribute
to international organizational behavior knowledge and practice. Cooperative but not
competitive or independent goals were strongly predictive of quality relations
22
between Chinese employees and their foreign managers. When Chinese employees
believed that their goals with foreign managers were cooperative, but not competitive
or independent, they were much more likely to develop quality LMX relationships
with their managers. These quality LMX relationships appear to be constructive
because they foster interaction that helps employees feel committed and motivated to
contribute to the organization.
Our findings overall provide the empirical support for using the theory of
cooperation and competition and the theory of LMX to guide the development of
leadership that crosses cultural boundaries. This study draws upon previous research
but extends this research by applying the theory in cross-cultural leadership settings.
The theory of cooperation and competition develops a framework for understanding
how goal interdependence affects interaction dynamics and how these dynamics affect
outcomes.
Our support for the theory of cooperation and competition helps to clarify the
popular assertion of the value of “common goals”. The theory indicates what is
critical about “common goals” is not that people have the same goal, but believe that
their goals are positively related, that one succeeds as the other succeeds. Leaders
may have the goal to please an important customer and the employee has the goal to
demonstrate his or her competence; but if they believe that their goals are compatible,
our results suggest that this experience enhances their relationship. However, if they
believe these goals are incompatible—for example, the employee believes he has to
demonstrate his competence by documenting that he was right and the customer
wrong—then these incompatible goals disrupt a high quality relationship.
23
Although results overall support the general theorizing that cooperative goals
promote LMX relationships and competitive and independent goals frustrate these
relationships, findings unexpectedly and tentatively suggest that independent goals
might induce a lower LMX relationship than competitive goals. Perhaps having a
connection, although competitive, contributes to the leader relationship more than the
indifference and lack of connection of independent goals. Independence may
communicate an aggressive rejection of the interdependence imposed upon them by
the organization. As these results are only suggestive, much more research is needed
to explore the role of independent goals in leader relationships.
Recently, researchers have argued that culturally diverse people need
theoretical frameworks for how to deal with barriers and obstacles and interact
effectively (Bond, 2003; Smith, 2003). Results suggest that Chinese employees,
despite their different cultures and unequal status, can develop cooperative goals with
their American managers. These goals are a foundation upon which Chinese
employees can overcome their cultural distance and develop a strong LMX
relationship with American managers.
Results also confirm the difficulties of working across cultures. Chinese
employees concluded that their managers with similar Asian cultural values--Hong
Kong, Taiwan and Japanese managers as well as Chinese managers--were more
effective than American managers and wanted to collaborate with them more in the
future. These findings occurred, although generally American managers have a higher
organizational status than Asian and Chinese managers in China.
24
Results also tentatively suggest that Chinese employees rated their Asian
managers higher than Chinese managers on leader effectiveness and future
collaboration. It may be that Chinese employees considered their Asian managers
culturally similar, but also interesting to work with. They may have been more
tolerant and understanding of Asian managers where they expected Chinese managers
to be more knowledgeable of how to work with them. Research is needed to
investigate these and other possible reasons for why Chinese employees appear to
want to collaborate with managers with similar cultural values, but appreciate their
Asian managers more than Chinese managers.
Although theories based on North American data cannot be assumed to apply
in other cultural settings (Adler, 1983), results of this study suggest the usefulness of
the theory of cooperation and competition in China and the theory of LMX. Although
developed in the West, the theories proved useful for understanding leadership
dynamics in East Asia (Deutsch, 1973). Goal interdependence was found to affect
leader effectiveness and employee commitment to the organization. The research
approach of identifying conditions that impact organizational dynamics and outcomes
in China with a theory that has universal aspirations may be a viable addition to the
traditional alternatives of comparing samples from different cultures and exploring a
culture variable with an indigenous theory (Bass, 1997; Leung, 1997). The research
approach used in this study can both probe general theories and improve
understanding of cooperative dynamics in non-Western cultures.
Limitations
The operations and sample, of course, limit the validity of the findings. The
results of many tests, though statistically significant, do not suggest the variables
25
account for a great deal of variance. The data are self-reported and subject to biases,
and may not be accurate, although recent research suggests that self-reported data are
not as limited as commonly expected (Spector, 1992). The study is also limited by
common method problems, but recent studies suggest that common method variance
may not be as much of an artifact as commonly assumed (Avolio, Yammarino and
Bass, 1991; Spector, 1987). It would be useful to assess directly and compare the
perspective of foreign managers as well as Chinese employees. The samples are not
representative of all Chinese employees with American, Asian and Chinese managers.
The lack of significant effects due to competition could have been because of
limitations of the competition scale as suggested by its low alpha for two of the three
groups. Results on comparisons between Chinese employees reactions to culturally
diverse managers across these respondents should be considered tentatively, as the
samples are not representative.
Research using different methods, larger and more representative samples is
needed to test and refine the propositions argued here (Spector and Brannick, 1995). It
would be desirable to provide direct experimental verification of the role of
cooperative goals on leader effectiveness between foreign managers and Chinese
employees.
Practical Implications
Foreign managers’ effective leadership of local employees may be quite useful
for facilitating the adaptation and application of multi-national expertise to local
conditions. However, developing quality relationships between managers and
employees who are also culturally diverse may be particularly difficult. In addition to
26
developing theoretical understanding, continued support for the hypotheses can have
important practical implications for strengthening leadership.
Results suggest that foreign managers and their employees can use the theory
of cooperation and competition to develop a high quality relationship that helps them
be effective. As cross-cultural interaction is a process of learning to live with changes
and differences (Anderson, 1994), managers and employees working for international
organizations can structure cooperative goals so that they can have quality
relationship and work effectively. In diagnosis, cooperative, competitive and
independent goal measures can help managers and employees identify their barriers to
a quality LMX relationship. Training for managers and employees who rate low on
cooperative goals can be provided to socialize them to form cooperative goals and to
develop key skills (Tjosvold and Tjosvold, 1995). They can be trained to reinforce
cooperative goals through shared goals, integrated roles, compatible task, team
identity, personal relationships, and shared reward distributions (Hambrick, 1994;
Hanlon, et al., 1994; Li, et al., 1999; Pearce, 1997).
Foreign managers and local employees can also be trained in important
cooperation skills, namely, how to express their own positions and views fully, and at
the same time, put themselves into other’s shoes and see the problem from other
person’s perspectives. They can also to learn to integrate their opinions to find
mutually benefit solutions. Realizing that they have cooperative goals, they try to help
each other achieve what they really need and value and avoid trying to win or outdo
each other.
27
Researchers have long argued for the value of relationships for organizational
work in China (Leung, 1987). Similarly, LMX research has indicated that the
relationship between manager and employee very much effects leadership success
(Brower et al., 2000; Graen and Uhl-Bien, 1995). Research has also indicated that
cooperative goals facilitate effective relationships (Deutsch, 1973). This study has
linked this theorizing on Chinese management, the idea of leader-member exchange,
and the theory of cooperation and competition.
Working with foreign managers offers opportunities for local employees, but
also presents challenges for developing an effective leader relationship; employees
and their managers need a framework for how they can overcome barriers and interact
effectively (Bond, 2003; Smith, 2003). Forming cooperative goals allowed Chinese
employees to develop strong, quality relationships, even with culturally diverse
managers. With cooperative goals, Chinese employees and their foreign managers
were able to overcome obstacles and cultural differences so that the leaders were
effective and employees were committed and wanted to work together in the future.
28
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40
Figure 1
Cooperation
Competition
Independence
LMX Relationship
Leader Effectiveness
Commitment to Organization
Future Collaboration
Table 1
Correlations among Variables
Mean s.d (1) (2) (3) (4) (5) (6) (7) (1) Cooperative 3.92 0.80 (.85) (2) Competitive 2.42 0.73 -0.27* (.60) (3) Independent 2.71 0.87 -0.31* 0.55** (.82) (4) LMX Relationship 3.52 0.74 0.46** -0.34** -0.40** (.83) (5) Leader Effectiveness 2.52 0.89 .59** -.40** -.42** .70** (.91) (6) Commitment 3.41 0.91 .39** -.28** -.14 .41** .65** (.87)
Chinese employees with
American Managers
(N=68) (7) Future Collaboration 3.31 0.86 .50** -.33** -.33** .56** .70** .59** (.85)(1) Cooperative 3.99 0.62 (.74) (2) Competitive 2.34 0.75 -.22* (.71) (3) Independent 2.44 0.91 -.30* .70** (.84) (4) LMX Relationship 3.72 0.62 .27** -.15* -.35** (.75) (5) Leader Effectiveness 3.06 0.86 .28** -.30* -.37** .71** (.83) (6) Commitment 3.85 0.60 .35** -.30* -.47** .59** .47** (.88)
Chinese Employees with
Asian Managers
(N=67) (7) Future Collaboration 3.78 0.73 .48** -.33** -.40** .53** .64** .60** (.83)(1) Cooperative 3.99 0.72 (.83) (2) Competitive 2.31 0.70 -.37** (.64) (3) Independent 2.77 0.85 -.40** .56** (.84) (4) LMX Relationship 3.53 0.78 .51** -.37** -.48** (.84) (5) Leader Effectiveness 2.47 0.73 .45** -.41** -.56** .51** (.89) (6) Commitment 3.67 0.73 .49** -.31** -.50** .50** .67** (.89)
Chinese Employees with
Chinese Managers
(N=95) (7) Future Collaboration 3.52 0.79 .45** -.41** -.56** .48** .85** .73** (.87)
Note: a Values in bracket are reliability (coefficient alpha) estimates. b **p<.01; *p<.05.
41
Table 2 Results of the Confirmatory Factor Analysis of the Measurement Models
d.f. Model χ2 △χ2 CFI NFIBaseline 7-factor model (M0) 9 22.03 .89 .93Combined LMX and LE (M1) 3 47.16 25.13 .69 .68Combined Leader effectiveness and Commitment (M2)
7 41.43 19.4 .73 .74
Chinese employees
with Western Managers
(N=68)
Combined Leader effectiveness and Collaboration (M3)
7 48.65 26.62 .69 .70
Baseline 7-factor model (M0) 9 24.23 .89 .92Combined Comp and Indep (M1) 7 56.49 32.26 .64 .68Combined LMX and Leader effectiveness (M2) 3 52.56 28.33 .71 .70
Chinese Employees
with Asian Managers
(N=67)
Combined Leader effectiveness and Collaboration (M3)
7 79.53 55.3 .50 .52
Baseline 7-factor model (M0) 9 30.13 .92 .94Combined Leader effectiveness and Commitment (M1)
7 118.46 88.33 .63 .64
Combined Leader effectiveness and Collaboration (M2)
7 74.15 44.02 .72 .72
Chinese Employees
with Chinese Managers
(N=95) Combined Commitment and Collaboration (M3) 7 93.19 63.06 .69 .69
Note: LE is Leader effectiveness
42
Table 3 Results of SEM Analyses
(Chinese Employees with American Managers)
Hypothesized Model Direct Effects Model Saturated Model
Path from Path to Path Coefficient Path from Path to Path Coefficient
Cooperative LMX Relationship .36** Cooperative Leader Effectiveness .49**
Competitive LMX Relationship -.13 Competitive Leader Effectiveness -.18
Independent LMX Relationship -.22 Independent Leader Effectiveness -.16
LMX Relationship Leader Effectiveness .67** Cooperative Future Collaboration .24*
LMX Relationship Commitment .41** Competitive Future Collaboration -.42**
LMX Relationship Future Collaboration .56** Independent Future Collaboration -.12
Cooperative Commitment .36**
Competitive Commitment -.24*
Independent Commitment -.16
Model χ2 22.03** Model χ2 53.54*** Model χ2 0
d.f. 9 d.f. 6 d.f. 0
NFI .89 NFI .67 NFI 1
CFI .93 CFI .66 CFI -
***p<.001; **p<.01; *p<.05
43
Table 4 Results of SEM Analyses
(Chinese Employees with Asian Managers)
Hypothesized Model Direct Effects Model Saturated Model
Path from Path to Path Coefficient Path from Path to Path Coefficient
Cooperative LMX Relationship .18* Cooperative Leader Effectiveness .18
Competitive LMX Relationship -.19 Competitive Leader Effectiveness -.06*
Independent LMX Relationship -.43* Independent Leader Effectiveness -.43**
LMX Relationship Leader Effectiveness .71** Cooperative Future Collaboration 41*
LMX Relationship Commitment .59** Competitive Future Collaboration -.08**
LMX Relationship Future Collaboration .53** Independent Future Collaboration -.23
Cooperative Commitment .23
Competitive Commitment -.08
Independent Commitment -.44
Model χ2 24.23** Model χ2 92.71*** Model χ2 0
d.f. 9 d.f. 6 d.f. 0
NFI .89 NFI .38 NFI 1
CFI .92 CFI .36 CFI -
***p<.001;**p<.01; *p<.05
44
45
Table 5 Results of SEM Analyses
(Chinese Employees with Chinese Managers)
Hypothesized Model Direct Effects Model Saturated Model
Path from Path to Path Coefficient Path from Path to Path Coefficient
Cooperative LMX Relationship .43** Cooperative Leader Effectiveness .25*
Competitive LMX Relationship -.06 Competitive Leader Effectiveness -.06
Independent LMX Relationship -.27* Independent Leader Effectiveness -.43**
LMX Relationship Leader Effectiveness .51** Cooperative Future Collaboration 27*
LMX Relationship Commitment .50** Competitive Future Collaboration -.07**
LMX Relationship Future Collaboration .48** Independent Future Collaboration -.42**
Cooperative Commitment .35**
Competitive Commitment -.07
Independent Commitment -.38**
Model χ2 30.13*** Model χ2 171.79*** Model χ2 0
d.f. 9 d.f. 6 d.f. 0
NFI .92 NFI ..43 NFI 1
CFI .94 CFI .42 CFI -
***p<.001; **p<.01; *p<.05
Table 6
t test
American Managers
Asian Managers
Chinese Managers
t value
Mean S. D.
Mean S. D.
Mean S. D.
American VS
Asian
Asian VS
Chinese
American VS
Chinese 1.Cooperative 3.92 0.80 3.99 0.62 3.99 0.72 -.62 .04 -.59 2.Competitive 2.33 0.73 2.34 0.75 2.31 0.70 -.05 .24 .19 3.Independent 2.71 0.87 2.44 0.91 2.47 0.85 1.77 -.18 1.79 4.LMX Relationship
3.51 0.74 3.71 0.62 3.53 0.78 -1.68 1.61 -.12
5. Leader Effectiveness
2.54 0.89 3.06 0.86 2.74 0.73 -3.45** 2.61** 1.52**
6.Commitmment 3.41 0.91 3.85 0.60 3.67 0.73 -3.31** 1.71 -1.96** 7.Future Collaboration
3.31 0.86 3.78 0.73 3.52 0.79 -3.45** 2.15* -1.65**
* * p<.01; * p<.05
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APPENDIX Scales and Items
Goal Interdependence
Cooperation
1. My manager and I share common goals.
2. I take interest in the things my manager wants to accomplish.
3. My manager and I want each other to succeed.
4. I am pleased when my manager succeeds.
5. My manager’s goal attainment contributes to my achievement.
Competition
1. What helps me gets in my manager’s way.
2. My manager and I have a win-lose relationship.
3. I structure things in ways that benefit my goals rather than my manager’s.
4. I care about my goal attainment, not my manager’s accomplishment.
Independence
1. My manager does not know what I want to accomplish.
2. Both my manager and I do our own thing.
3. I do best when I work alone rather than with my manager.
4. My manager and I work for our own separate interests.
5. My manager’s success is unrelated to my success.
Mediator
LMX Relationship
1. My manager and I care about each other’s work problems and needs.
2. My manager and I recognize each other’s potential.
3. My manager and I are inclined to pool our available resources to solve the problems in my work.
4. My manager and I have confidence in each other’s capability.
5. My manager and I are satisfied with each other’s work.
Outcomes
Leader Effectiveness
1. My manager performs his leader roles appropriately.
2. My manager exercises his responsibilities well as a leader.
3. I am satisfied with my manager’s overall effectiveness as a leader.
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4. The way my manager manages the work inspires me to a better job performance.
5. I can work effectively under the leadership of my manager.
Commitment to Organization
1. I have a strong sense of belonging to my company.
2. This firm has a great deal of personal meaning to me.
3. I feel “emotionally attached” to this firm.
4. I am highly committed to the goals of my company.
5. In general, I am highly pleased and satisfied working for my company.
Future Collaboration
1. I hope I can work with my manager in the future.
2. I hope my manager can help me to recognize and correct my mistakes in the future.
3. I will try to seek opportunities to work with my manager in the future.
4. I would be very pleased if my manager continued to be my manager in the future.
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