culture and commitment to statusquo

8/10/2019 Culture and Commitment to Statusquo

http://slidepdf.com/reader/full/culture-and-commitment-to-statusquo 1/20

Strategic Management Journal, Vol. 18:8, 615–634 (1997)

THE SALIENCE OF ‘CULTURE’S CONSEQUENCES’:

THE EFFECTS OF CULTURAL VALUES ON TOP

EXECUTIVE COMMITMENT TO THE STATUS QUO

MARTA A. GELETKANYCZThe Wallace E. Carroll School of Management, Boston College, Chestnut Hill,Massachusetts, U.S.A.

While top executives are argued to play a central role in strategic adaptation, evidence suggeststhat they are not equally open to organizational change. This study extends earlier investigationof the determinants of top executive commitment to the status quo (CSQ) to the internationalarena, examining the influence of cultural values on executive open-mindedness toward change.Using data from a survey of top managers in 20 countries, analyses reveal that values of individualism, uncertainty avoidance, power distance, and long-term orientation are significantlyrelated to executives’ adherence to existing strategy and leadership profiles. Further, whileconfirming earlier findings that industry tenure is positively related to strategy CSQ, resultsshow that tenure does not significantly affect leadership CSQ once cultural values are controlled.

In summary, the findings reveal that culture has an important impact on executive mindsets,as demonstrated by the fact that executives of differing cultural background are not equallyopen to change in organizational strategy and leadership profiles. Second, the findings suggest that executives’ views of appropriate leadership profiles reflect the imprint of cultural sociali-

zation moreso than professional experience. Finally, and more broadly, the study offers empiricalsupport for the view that values figure prominently in shaping executives’ strategic and leadership orientations. © 1997 by John Wiley & Sons, Ltd

Strat. Mgmt J. Vol. 18, 615–634 (1997)No of Figures: 1. No of Tables: 5. No of References: 64.

An important volume of strategy research is agers maintain a vigilant and adaptive stance,ready to engage in organizational change andfounded on the premise that to remain viable,

organizations must adapt to changes in their redirection as required to meet changing contin-gencies. Evidence suggests, however, that man-environment. Traditionally, scholars adhering to

an adaptation perspective have argued that the agers are not universally open to change, even inthe context of significant environmental adjust-task of effecting an alignment between the firm

and its environment rests with senior management ment (e.g., Harrigan, 1985; Pettigrew, 1985).Rather, many develop a strong personal attach-(Child, 1972; Pfeffer and Salancik, 1978). Thus,

it is presumed that as the firm’s strategic leaders, ment to existing policies and profiles which effec-tively impedes change in organizational strategy,top managers monitor the external environment

for developments of relevance to the organization and the systems and practices which support it.To date, little empirical research has exploredand its strategic policies, and initiate adjustment

as needed (e.g., Andrews, 1971; Hambrick and executive resistance to change and its antecedents.One exception is the recent study by Hambrick,Mason, 1984).

Implicit in this view is the idea that top man- Geletkanycz, and Fredrickson which examinedseveral commonly posited determinants of topexecutive commitment to the status quo (CSQ)—or ‘belief in the enduring correctness of currentKey words: executive cognition; strategic change;

executive values; national culture organizational strategies and profiles’ (1993: 402).

CCC 0143–2095/97/080615–20 $17.50 Received 3 July 1995© 1997 by John Wiley & Sons, Ltd. Final revision received 12 September 1996



616 M. A. Geletkanycz

Using data from a sample of U.S. executives, 1965). Researchers contend, however, that a sel-ect subset is especially germane to strategic lead-Hambrick et al. empirically confirmed a long-

suspected relationship between positive percep- ership and decision making, and many agree thatamong the most influential are the social valuestions of current performance and little felt need

for organizational change. At the same time, they embedded in national culture (e.g., Finkelsteinand Hambrick, 1996; Hambrick and Brandon,examined the role of executive characteristics,

finding that firm and industry tenure share moder- 1988). Of particular importance, cultural valuesplay a central role in shaping managerial viewsate and strong associations, respectively, withadherence to existing strategy and leadership pro- of the environment and appropriate organizational

responses (e.g., Kluckhohn and Strodtbeck, 1961;files; however, executive age was unrelated toCSQ. Reflecting on this pattern of findings, Ham- Schein, 1985). Consequently, they are posited to

influence the strategy formulation process and itsbrick et al. concluded that experientialbackground—in particular, the social contexts in outcomes (Hambrick and Brandon, 1988; Schnei-

der, 1989). In the present study we test thiswhich executives function—constitute a signifi-cant determinant of executives’ orientation toward hypothesized linkage by examining the impact of

cultural values on executive CSQ across a sampleorganizational change. Most notably, executiveswho have amassed long tenures seem to accrue of top managers of 20 diverse nationalities.

To begin, an overview of the relationshipa socially constructed ‘industry wisdom’ which

is not only difficult to cast aside, but also reduces between values, particularly those associated withnational culture, and strategic decision making isopenness to policies and profiles different from

those already in place within the firm. presented. We then develop hypotheses concern-ing the effects of cultural values on executiveThe critical role top managers play in strategic

adaptation suggests that further inquiry into CSQ using Hofstede’s ( 1980, 1991) typology,which a number of scholars has theoreticallyexecutive commitment to the status quo and its

determinants is warranted. In this study, we linked to strategic choice (e.g, Hambrick andBrandon, 1988; Schneider, 1989). Our hypothesesextend Hambrick et al.’s (1993) initial investi-

gation in two important manners. First, we revisit are tested using data from a large-scale, globalstudy of executive perceptions of the current andupper echelons theory to examine a second set

of possible determinants. Hambrick and Mason future environmental challenges confronting theirorganizations, as well as existing and ideal (for(1984) proposed that strategic choices are a

reflection of top executives’ cognitive base the future) strategic and leadership profiles.Results of multivariate tests are presented, and(shaped largely through background experiences)

and values. While the effects of demographic and their implications for research into executive lead-ership and strategic adaptation are discussed,experiential characteristics on executive CSQ

have been explored, the impact of executive together with the relevance of our findings forpracticing managers.values has not yet been considered. Interestingly,

this omission is not unique. Rather, executivevalues have largely evaded systematic investi-gation in studies of strategic choice and executive THEORETICAL BACKGROUND AND

HYPOTHESESleadership, barring Hage and Dewar’s (1973)research into management team values andorganizational innovation (e.g., Finkelstein and The upper echelons perspective maintains that in

their capacity as strategic decision-makers, execu-Hambrick, 1996). Consequently, in examining therelationship between executive values and com- tives play a key role in shaping organizational

profiles (Hambrick and Mason, 1984). Theirmitment to the status quo, this study partlyaddresses a larger void in the literature. impact is argued to be effected through several

related processes by which the organization’sAt the same time, we extend the study of CSQinto the international arena by focusing on the environment is monitored and choices designed

to cope with its contingencies are made (i.e.,impact of values related to executives’ nationalculture. Like all individuals, executives maintain a external scanning, interpretation, alternative gen-

eration, and selection). Typically, these processeswide array of values, including religious, political,theoretical, and social values (Guth and Tagiuri, are ill-defined, complex, and laden with ambigu-



Cultural Values and Commitment to the Status Quo 617

ous stimuli (e.g., Mintzberg, Raisinghani, and and preferences as important factors, Hambrick and colleagues focus their empirical investigationTheoret, 1976), creating a context that taxes the

cognitive limitations of most managers. As a largely on executives’ experiential background asa determinant of CSQ, leaving the effects of result, decisions are argued to reflect executives’

selective filtering and interpretation of available values untested.stimuli—this through the idiosyncratic lenses of

their beliefs, knowledge, assumptions, and prefer-ences (March and Simon, 1958; Cyert and NATIONAL CULTURAL VALUESMarch, 1963).

Insofar as executives’ background experiences Among the earliest and most enduring influenceson executive value development is national cul-and values help to shape the knowledge, assump-

tions, and preferences utilized in decision making, ture (England, 1975). Defined as a set of sharedassumptions, culture represents the system of Hambrick and Mason (1984) propose that they

will be reflected in organizational outcomes. socially constructed meanings and preferences agroup develops as it collectively negotiatesValues—broadly defined as principles for

ordering consequences and alternatives according environmental forces and the complexities of internal integration (Hofstede, 1980, 1991;to preference (1984: 195)—are posited to yield a

particularly salient effect on strategic choice Schein, 1985). Restated, national culture can be

interpreted as a common frame of reference orbecause they influence the decision process inseveral ways. First, values directly affect strategic logic by which members of a society view organi-

zations, the environment, and their relations tochoice through a process known as ‘behaviorchanneling’ (England, 1967). In this manner, one another. In turn, scholars have surmised that

national culture is likely to yield important effectsvalues determine choice, as when executives basetheir selection of a strategic course of action on on ‘the process by which the environment is

“known” and responded to’ (Schneider,personal preferences. In addition, values indirectlyaffect choice through a process of ‘perceptual 1989: 152).

As members of national societies, managersscreening’ (England, 1967), or subtle shaping of managers’ limited view of the organization and not only contribute to the collective formulation

of cultural norms and views, they experienceits environment. Much as executives attend toinformation which is familiar or within their social reinforcement pressures which bring their

individual-level assumptions and preferences intorealm of knowledge (Simon, 1957), they selec-tively focus on information which supports their close alignment with those of their native culture

(e.g., Berger and Luckmann, 1967; Van Maanenparticular preferences. As a result, executives notonly develop limited views of reality which reflect and Laurent, 1993). In fact, research has shown

that the differing views and assumptions embed-their underlying value orientations, but sub-sequently formulate and select strategic choices ded in national culture are reflected not only in

managerial attitudes and beliefs (e.g., Lodge andconsistent with those values (Hambrick and Bran-don, 1988). Vogel, 1987), but also in the behaviors and

actions by which organizational members dis-The two pathways by which values influencethe strategic choice process have also been linked charge their roles (Jackofsky and Slocum, 1988;

Shane, 1995).to the development of an orientation adverse tochange in current organizational profiles, or CSQ. Recently, scholars have begun to explore the

link between national culture and strategicIn conceptualizing executive commitment to thestatus quo, Hambrick et al. (1993) argue that decision making. In a survey of managers of

diverse cultural background, Schneider andexecutives may, on one hand, adhere to existingpolicies because of a preference for the current DeMeyer (1991) uncovered significant differences

in interpretations of and response to a strategicstate of affairs and the arrangements it entails.At the same time, they concede that executives issue, with managers of Latin European back-

ground exhibiting a strong crisis orientation inmay adhere to the status quo due to an inabilityto conceive of other approaches. In other words, reaction to an impending environmental adjust-

ment. Further, these same Latin European man-executives’ simplified models of reality may notsupport alternative scenarios. While citing values agers tended to recommend a proactive course of




action. In accounting for these findings, Schneider (1988), and Schneider (1989), we expect thatexecutives’ orientation toward change in currentand DeMeyer point to underlying differences in

national culture. However, they did not identify organizational profiles (or CSQ) will reflect thevalues embedded in their national culture. Morethe factors (or processes) driving these differ-

ences, but left them for future discovery specifically, we predict that executives of dif-fering cultural background will vary in the extent(1991: 315).

The conceptual work of Hambrick and Brandon to which they recognize the need for and areopen to change in existing organizational profiles.(1988) and Schneider (1989) suggests that thevariation in executives’ strategic orientation may As depicted in Figure 1, this variation is attrib-

uted to differences in underlying cultural values,be attributable to the different values embeddedwithin national cultures. As noted earlier, culture and the assumptions and preferences they reflect.

A number of typologies report to capture criti-reflects a given society’s understanding of organi-zations, environments, and their interrelationships. cal differences in national cultural values (e.g.,

Ronen and Shenkar, 1985). For purposes of thisCultural values capture the salient dimensions of this understanding, together with broad societal investigation, we rely on the value scheme

developed by Hofstede (1980, 1991). Several fac-preferences surrounding issues of organizationand adaptation (Hofstede, 1991). Executives— tors guide this selection, with the most critical

being the particular relevance of Hofstede’ssocialized from an early age to the value orien-

tations of their cultural heritage—bring them to dimensions to our research question. In an exten-sive reconciliation of value schemes, Hambrick their senior management roles and responsi-

bilities, including strategic decision making (e.g., and Brandon (1988) observed that the valuescontained in Hofstede’s typology reflect enduringHambrick and Mason, 1984). Thus, Hambrick

and Brandon, as well as Schneider, theorize that themes central to executive leadership and stra-tegic decision making. Schneider (1989) echoescultural values will be reflected in executives’

strategic choices. In particular, they suggest that this conclusion for reasons that its dimensionscapture preferences and assumptions related tocultural values will not only help to shape execu-

tives’ view of organizations and the external con- external adaptation and internal integration.Together, their observations suggest that thetingencies they face, but also executives’ prefer-

ences for different courses of strategic action. typology profiles value differences which aretheoretically important to executives’ strategic

mindset.1 We turn now to an examination of thevalue dimensions identified by Hofstede:HYPOTHESESindividualism–collectivism, uncertainty avoid-ance, power distance, masculinity–femininity, andRecognition of the need for change in current

organizational profiles is a central aspect of stra- long-term vs. short-term orientation.tegic choice as it triggers the search for andimplementation of new measures (Child, 1972;Pfeffer and Salancik, 1978). However, Hambrick et al. (1993) empirically demonstrated that man- 1 Apart from an established conceptual linkage with strategic

choice, Hofstede’s typology demonstrates numerous strengthsagers are not equally open to change in extantover alternate cultural value frameworks. First, it encompassespolicies even in the face of significant environ-value dimensions which are ‘robust concepts’, having strong

mental adjustment. Their study revealed thatroots in both the anthropology and sociology literatures(Hickson, 1996). Hofstede’s study also represents the mostexecutives often develop a strong attachment toexhaustive cross-cultural investigation of values conducted tothe status quo which in part stems from prolongeddate, involving over 88,000 individuals and 50 countries.

tenure and accompanying socialization to industry Since its original publication, the study has been successfullyreplicated by several independent scholars using different‘recipes’ (Spender, 1977).samples and alternate time intervals (e.g., Hoppe, 1990;The research cited above suggests that anShackleton and Ali, 1990), leading researchers to conclude

examination of the determinants of executives’ that it meets critical standards of reliability and validity(Hambrick and Brandon, 1988; Kogut and Singh, 1988; Shane,strategic orientations should also consider the1995). Finally, the sheer breadth of countries for which iteffects of cultural values. Building on the theo-offers value measures renders it particularly well suited to

retical foundation laid by scholars including Ham- large-scale cross-cultural investigations such as the presentone.brick and Mason (1984), Hambrick and Brandon




Figure 1. Integrated model

performance than do their counterparts in moreIndividualism–collectivism

collectivist societies.Together, these research findings suggest thatA key dimension along which cultures differ

concerns interpersonal relations. In cultures with managers of highly individualistic societies maybe more prone to developing a vested interest instrong individualist values, societal members per-

ceive themselves largely as individual actors. the organizational status quo. As Vancil (1987)observed, executives are faced with and overcomeSocial norms typically affirm the positive qualities

of individual achievement and personal discretion, numerous challenges in their ascension to seniorranks. In the course of their career successes,leading members to place personal interests above

those of the aggregate. In organizational contexts, they frequently become convinced of the appro-

priateness of their actions and choices. Individual-individualist values have been linked to prefer-ences for individual decision making over group ist values, and the strong leadership attributions

which accompany them, may well exacerbateconsensus (Hofstede, 1980). By contrast, insocieties emphasizing collectivist values, interper- executives’ sense of self-efficacy (e.g., Meindl,

Ehrlich, and Dukerich, 1985). That is, individual-sonal relationships and group affiliation are highlytouted. Concerns over group welfare, equality, ist values may induce an overconfidence in execu-

tives’ ability to lead the firm, which taken to anand loyalty are prominent, as aggregate intereststend to prevail over autonomous ones extreme is likely to diminish executives’ capacity

to sense the need for change in profiles they have(Hofstede, 1991).The values associated with individualism– helped to effect.

At the same time, individualist values are likelycollectivism are central to assumptions and viewsof strategic leadership. Jackofsky and Slocum to foster a greater preference for the organiza-

tional status quo. Executives of individualist cul-(1988), for example, observed that in highly indi-vidualistic cultures there exist stronger attributions tures are closely identified with existing profiles

(e.g., Pennings, 1993). They may, therefore, beof organizational performance to executive leader-ship. One consequence of this tendency is greater unwilling to amend policies for reasons that

changes could be interpreted as an admission of turnover in executive positions within individual-ist cultures. Relatedly, in a cross-cultural study the inappropriateness of earlier decisions—or

even worse, their leadership abilities. Thus, forof executive compensation, Pennings (1993)found that U.S. managers, members of a highly face-saving reasons (Staw and Ross, 1978), as

well as career concerns, executives of strongindividualistic culture, maintain stronger beliefsin the linkage between executive pay and strategic individualist orientation are likely to prefer adher-




ence to the existing organizational course over avoidance values associated with an execu-

tive’s national culture, the greater the execu-adjustment.tive’s commitment to the status quo.

Hypothesis 1: The greater the individualist

values associated with an executive’s nationalMasculinity–Femininity

culture, the greater the executive’s commitment

to the status quo. This value dimension addresses two issues: gen-der roles and qualities often ascribed to them.With regard to the latter, Hofstede’s (1980)

Uncertainty avoidanceexamination revealed significant differences in theextent to which cultures emphasize so-calledThe value dimension of uncertainty avoidance

concerns response to unstructured and ambiguous ‘masculine’ qualities of assertiveness, ambition,and competition over more ‘feminine’ ones of contexts. In high uncertainty avoidance cultures,

societal members tend to feel uncomfortable deal- modesty, caring, and solidarity. In masculine cul-tures, preferences lean in the direction of mana-ing with uncertainty. As a result, preferences lean

toward greater structure, together with clear rules gerial decisiveness and a performance orientation.In feminine cultures, a more social orientation isand standardized operating procedures (Hofstede,

1980). By contrast, in low uncertainty avoidance observed, accompanied by a strong concern for

the preservation of existing relationships.cultures there exists a greater tolerance for uncer-tainty. Members are relatively more at ease with While gender roles have not been linked to

strategic activity, the preferences and views asso-unfamiliar situations, and assumedly more tolerantof different ideas, approaches, and concepts. ciated with masculine values suggest that they

may be more conducive to change. MasculineBy its definition, uncertainty avoidance issuggestive of managerial resistance to change. cultures, for example, view qualities of aggres-

siveness and an action orientation favorablyChange, or deviance from existing policy, con-notes adjustment and variance in the current state (Hofstede, 1980). Unlike feminine cultures,

wherein the maintenance of stable and nurturingof affairs. Executives who maintain a low toler-ance for conditions other than a predictable or interpersonal ties are given a high priority, mascu-

line cultures place strong emphasis on results. Incertain context are likely to shy away from ren-dering action which alters their environment. short, the task at hand is key, taking precedence

over social relations. This suggests that executivesRather, as Kets de Vries and Miller (1986) con-clude, executives favoring an (uncertainty) avoid- socialized to masculine values will be more

receptive to policies which call for the alterationant perspective are likely to prefer a more stableand conservative intraorganizational environment of existing arrangements, particularly in situations

(such as strategic leadership) where change or— in essence, one that adheres to the status quo.By contrast, executives whose cultural back- adaptation enhances chances of success (e.g.,

Aldrich, 1979).grounds are characterized by low uncertaintyavoidance values are more comfortable with insta-bility. Consequently, Hambrick and Brandon Hypothesis 3: The greater the masculine

values associated with an executive’s national(1988) posit that they are likely to be less averseto novelty, and more open to experimentation culture, the less the executive’s commitment to

the status quo.with new or untested initiatives. In a similar vein,Schneider (1985) concluded that executives fromcultural backgrounds low in uncertainty avoidance

Power distanceare likely to engage in greater entrepreneurialactivity. Together, these observations suggest that The value dimension of power distance addresses

the issue of social (in)equality. Cultures withit is executives whose background cultures arecharacterized by low uncertainty avoidance values low power distance values are typically more

egalitarian in nature, with societal memberswho will be more open to new or different poli-cies. viewed largely as equals. At the other extreme,

high power distance cultures are characterizedby significant inequalities among their individual Hypothesis 2: The greater the uncertainty




constituents. Class divisions typify these societies, ented cultures, on the other hand, tend to be fixedon the present and past; their members typicallyleading to the concentration of power and au-

thority among select groups (Hofstede, 1980). uphold the importance of stability and tradition(Hofstede, 1993).In high power distant cultures, hierarchical

structures and centralized decision making are the A common assumption in long-term orientedcultures is that success mandates adjustment andnorm, in part because they help preserve the

existing social order and its related distribution of change. Members of these cultures recognize thatenvironments are dynamic; therefore, if goals andpower (Hofstede, 1980). Hage and Aiken (1970)contend that such bureaucratic tendencies often objectives are to be met, individuals must remain

steadfast in their intent while confronting andpose formidable barriers to novelty and change.For example, centralization promotes routinized adapting to changes in their surrounding context.

To that end, Hofstede (1991) observes that long-behavior and reduces organizational responsive-ness to changing external conditions. At the same term oriented values are more conducive to suc-

cessful entrepreneurial activity. By contrast, mem-time, it offers little incentive for innovation.These factors may play a role in the partial bers of short-term oriented, or low Confucian

dynamism cultures are more reflective, frequentlysupport Shane (1993) observed for a hypothesizedlinkage between power distance values and differ- looking back to the past. Their values tend to

emphasize personal steadiness and respect forences in rates of innovation across cultures.

Accordingly, we expect that high power dis- traditional practice. Consequently, new initiatives,innovation, and change are typically discouragedtance values are likely to encourage greater

executive adherence to policies already estab- in favor of actions which uphold historical mores(Hofstede, 1991).lished within the firm. On one hand, executives

accustomed to routines may be unable to appreci- These observations suggest that values linkedto long-term vs. short-term orientation are likelyate the wisdom of alternatives which break from

standardized practice. Rather, they are likely to to hold significant importance for strategic adap-tation and executive CSQ. To the extent thatassume that routinized policies are most appropri-

ate. What’s more, the hierarchical structures typi- long-term oriented societies anticipate a changingenvironment, managers may be more open tocal of high power distance cultures may isolate

them from new ideas and opportunities, leading to change in extant organizational profiles. In fact,consistent with long-term values, they are likelyan executive inability to envision policies which

deviate from the organizational status quo. to assume that adjustments to the status quo areneeded to ensure continued success. By contrast,Finally, high power distance values may foster a

resistance to change due to concerns over estab- executives of short-term oriented cultures arelikely to promote fewer new initiatives inasmuchlished power structures. Executives of high power

distance cultures may be reticent to consider new as they prefer adherence to past conventions.initiatives for fear that adjustment would disruptextant power balances, placing their high-ranking Hypothesis 5: The greater the long-term ori-

ented values associated with an executive’sstatus and position at risk.national culture, the less the executive’s com-

mitment to the status quo. Hypothesis 4: The greater the power distance

values associated with an executive’s national

culture, the greater the executive’s commitment

to the status quo. METHODS

Sample

Long-term vs. short-term orientationData used to test our hypotheses were drawnfrom a global study of top executives conductedThis fifth cultural dimension, also known as Con-

fucian dynamism, refers to preferences between in 1988. A survey was administered asking seniorexecutives to describe their firm’s existing (1988)a forward-looking vs. more historical perspective.

Cultures maintaining a long-term orientation are strategic and leadership profiles, as well as theprofiles they considered appropriate for theircharacterized by values emphasizing the future,

including thrift and perseverance. Short-term ori- organization in the year 2000. The instrument




was distributed to a total of 8000 executives based on these scholarly works, a panel of 20senior executives was asked to examine the con-worldwide, with 1540 usable responses received

for an effective response rate of 19 percent. While structed scales and contribute their thoughts onany omissions or inappropriate items. Per theirbelow the average for studies employing survey

methods, this response rate is well within the review and comments, the instrument was modi-fied and submitted to a second panel of 20. Thisnormal range for research on top managers. In

fact, it is above the 10–12 percent rate typical latter group suggested only minor changes, whichwere likewise instituted.for study targeting executives in upper echelons(Hambrick et al., 1993; Pearce and Zahra, 1991), The survey, initially prepared in the United

States and thus in the English language, wasand compares favorably with response ratesreported in cross-cultural studies of top manage- translated into five additional languages: French,

German, Italian, Japanese, and Spanish. Follow-ment (e.g., Norburn, 1987).Sample organizations were derived from coun- ing a standard protocol designed to alleviate

potential problems of translation bias, these ver-try-specific lists of industry leaders. For the U.S.sample, these included the Fortune 500, the For- sions were then back-translated into English to

verify accuracy and compatibility. Few inconsist-tune Service 500, and assorted industry rosters.For the non-U.S. sample, mailing lists were encies were identified in the front and back trans-

lation, in part because the survey was designedderived from Dun and Bradstreet’s Directory of

Principal International Businesses, foreign minis- with an emphasis on common business termi-nology and minimal use of idiomatic statements.tries of commerce, and available published rank-

ings of industry leaders (e.g., Times of London Those which were revealed were reconciled withthe assistance of staff from an international1000). In total, responses were received from

managers of 20 nationalities representing: executive recruiting firm (also cosponsor of theinitial research project), which regularly conductsArgentina, Australia, Belgium, Brazil, Canada,

France, Germany, Italy, Japan, Mexico, Nether- large-scale survey research of top management.At the same time, the size of our sample reduceslands, Norway, Singapore, South Korea, Spain,

Switzerland, Thailand, United Kingdom, United the risk of any translation bias which might haveescaped the rigor of the survey’s front-and-back States, and Venezuela. An examination of the

organizations they led reveals a diverse range of translation. As Hofstede et al. (1990: 288) note,‘national idiosyncrasies and nuances of question-businesses, with 21 percent of the firms primarily

focused on industrial products, 22 percent on naire translation weigh heavily in a two-, three-,or four-country study, but . . . national patternsconsumer products, 19 percent on financial ser-

vices, and 38 percent principally involved in other start to show a global structure, which the “noise”of the idiosyncrasies of individual countries can-service industries. The average size of our sample

firms measured by the number of employees was not suppress’ in studies involving larger samples.This suggests that the risk of translation error21,219 (standard deviation = 45,800). While the

broad range of businesses and countries captured accounting for this study’s significant findingsis relatively small (Shane, Venkataraman, andin the sample enhances the generalizability of

findings across industry and cultural environ- MacMillan, 1995). Ideally, the absence of trans-lation bias would be verified through a compari-ments, our use of a nonrandom sampling pro-

cedure suggests possible limits to generalizability son of results for respondents answering in theirnative language and those for respondents answer-across other settings (e.g., small firms).

Considerable attention was directed to the for- ing in a second or foreign language. Our surveydesign, however, failed to capture data on respon-mulation of the survey instrument, including its

pretesting. Initially drawn from earlier research dents’ first language. Thus, we were precludedfrom conducting the test in the present study.into leadership and strategy, survey scales

underwent augmentation based on the contri- Nonetheless, it remains an important methodolog-ical refinement for future cross-cultural studies.2butions of expert panels. Specifically, appropriate

inventories of strategy and leadership dimensions Prior to the mailing of the professionally pro-were first extracted from studies by Hambrick (1983), Kotter (1988), Levinson (1980), and

2 Thanks are owed an anonymous reviewer for this suggestion.Porter (1980). Following initial construction




duced survey, an advance personalized letter was CEOs should be similar, was derived by sub-tracting the difference measure from thesent to the CEO of each sample organization

requesting his/her participation. Those who did maximum possible difference score of 4.Strategy CSQ was measured in a manner iden-not respond to the initial distribution of the ques-

tionnaire were sent a follow-up mailing. In total, tical to leadership CSQ, though based on respon-dents’ scores gauging the degree to which he/she58 percent of the usable surveys were answered

by CEOs themselves, as reported in a survey perceived that 11 different types of competitiveweaponry and seven modes of growth strategyitem inquiring about the respondent’s title, while84 percent were completed by CEOs or their accurately described the firm at the time of the

study (1988), and would be appropriate for thedirect reports. The remaining 16 percent workedclosely with the CEO, or top executive group. same organization in the year 2000. The Cron-

bach alpha for these items is 0.76. The reader isThe mean age of all respondents was 51 years(standard deviation = 8.79). again referred to Appendix 1 for their summary

listing).

Measures

National cultural valuesCommitment to the status quo

Respondents were assigned their country’s cul-Two organizational profiles shaped by executives tural value score for individualism, uncertaintyare examined in this study: organizational strategy

avoidance, masculinity, power distance, and long-and leadership. Absent any a priori expectations

term vs. short-term orientation as provided inof differences in executive attachment to either

Hofstede (1980, 1991). (A summary of countrystrategic or leadership characteristics, or poten-

scores is presented in Appendix 2). These meas-tially differential effects of cultural values on

ures were employed for several reasons. First,either profile, both were studied in an effort to

cultural values, like all social values, are group-better assess executives’ adherence to the organi-

level phenomena. Consequently, they are mostzational status quo. Their measurements,

accurately captured at the group (country) leveldescribed below, were developed and validated

(Hofstede et al., 1990). At the same time, ain an earlier study of executive CSQ by Hambrick

number of methodological advantages is offered.and colleagues (1993).

First, use of scores derived in an outside study Leadership CSQ captures the degree to which precludes potential problems of common-methodrespondents believed that the present (1988)

bias. In addition, concerns over validity andCEO’s expertise and behaviors should constitute

reliability are mitigated as Hofstede’s scores havethe expertise and behaviors of the CEO in the

repeatedly been tested and shown to meet reason-year 2000. It was measured by first asking

able standards (e.g., Kogut and Singh, 1988).respondents to describe along a 5-point scale the

This last point noted, we nevertheless undertook extent to which a series of 11 areas of expertise

a second test of the hypotheses substituting valueand 15 managerial behaviors accurately depicted

scores from a replication study by Hoppe (1990).their firm’s current CEO. (Survey items and scal-

The results confirmed those achieved using Hof-ing methods are detailed in Appendix 1). Respon-

stede’s scores, attesting further to their validity.dents were then asked to identify the extent towhich they perceived these same dimensions of expertise and behavior appropriate for the CEO

Control variablesserving at the helm of the firm in the year 2000,again using a 5-point scale. Absolute differences Prior investigation has shown that factors includ-

ing perceptions of organizational performance,in the two scores for each of the expertise andbehavioral items were calculated and averaged industry tenure, expected environmental change,

and CEO status are each related to executive CSQ(Cronbach alpha: 0.79), creating a measure of theextent to which the respondent believed the cur- tendencies (Hambrick et al., 1993). Consequently,

they are included in the analyses, together withrent and future leaders should differ along theseattributes. A measure of leadership CSQ, or per- industry identifiers designed to control for any

possible industry influences.ceived degree to which the current and future




Organizational performance Research suggests the same time, there may exist a response biasassociated with respondents’ status. Namely,that, absent perceptions of poor or unacceptable

performance, individuals will frequently resist respondents may answer differently when describ-ing another (CEO), than when describing them-organizational change in favor of persistence with

extant policies (e.g., Kimberly and Quinn, 1984; selves.3 CEO respondent was operationalized asa dummy variable, created through a survey itemMilliken and Lant, 1991). Not surprising, then,

executives’ assessments of their organization’s in which respondents described their position(chief executive, direct report, or other).performance have been shown to be positivelyrelated to CSQ (Hambrick et al., 1993). Respon-dents’ perceptions of their firm’s performance Industry controls Finally, to control for possible

industry effects on CSQ tendencies, 29 dummywere captured by asking them to describe theirorganization’s profitability using a 4-item scale, variables were created to differentiate the 30 pri-

mary industries identified by respondents’ self-with 1 = unprofitable, 2 = breaking even, 3 =

moderately profitable, and 4 = very profitable. reports of their firm’s competitive focus.

Industry tenure Previous study has shown thatthose executives who have accrued the longest RESULTSindustry tenures demonstrate the greatest CSQ

(Hambrick et al., 1993). As such, tenure in the Table 1 provides descriptive statistics on execu-tive CSQ, cultural values, and key control vari-industry was measured by asking respondents

how many years they had worked in the current ables. Consistent with expectations, correlationalanalyses reveal that cultural values are related toindustry.executive openness to change, with four of fivevalues (masculine values being the single Expected environmental change Environmental

change figures prominently in organizational exception) significantly related to commitment tothe status quo.4 Further, they suggest that currentadaptation. To the extent that executives perceive

an unchanging environment, they may fail to performance, industry tenure, expected degree of environmental change, and CEO status are eachsense the need to alter the status quo. Hence,

a third control variable, expected environmental correlated with CSQ, confirming the need fortheir control.change, was introduced. It was captured using

items which asked respondents to describe the Multiple regression results (omitting coef-ficients for industry dummy controls) are reportedcurrent and expected future relevance of 23

environmental factors (e.g., change in product in Table 2. This method was chosen over hier-archical regression because causal priority couldtechnology, availability of capital, foreign compe-

tition, government regulation) along a 5-point scale not be persuasively attributed to the earlier-observed determinants of CSQ. In fact,(ranging from not relevant/very low to very high).

They were then asked to identify from the list the researchers have suggested that the social influ-ences attendant to national culture are perhapsthree most threatening and three most favorable to

their firm at the time of the study, and those more fundamental to executive perception andaction than influences associated with professionalanticipated to be so in the year 2000. Absolute

difference scores in the current and future relevance experience (e.g., Jackofsky, Slocum, andMcQuaid, 1988; Van Maanen and Laurent, 1993).of these most critical environmental dimensions

were calculated and averaged, creating a measure This said, the results were unchanged under hier-archical regression methods. As reported in Tableof expected environmental change.2, the cultural values were not introduced into the

CEO respondent CEO status is added for twoimportant reasons. First, CEOs are often, though

3 Thanks to an anonymous reviewer for this observation.not always, the most powerful of organizational 4 We earlier advanced a general hypothesis that executive

CSQ varies across cultures. Though not reported here, anmembers (Finkelstein, 1992). When true, existinganalysis of variance examining differences across aggregatefirm profiles may well reflect their preferencescountry clusters was performed. It revealed that, as expected,

above others’—suggesting that CEOs will hold executive commitment to both the strategic and leadershipstatus quo varies significantly across cultures.the greatest vested interest in the status quo. At



Table 1. Descriptive statistics

Mean S.D. 1. 2. 3. 4. 5. 6. 7.

1. Leadership CSQ 3.39 0.30 1.002. Strategy CSQ 3.49 0.32 0.31*** 1.003. Current performance 3.17 0.77 0.08** 0.10*** 1.004. Industry tenure 19.32 12.10 0.09*** 0.08** 0.04 1.00

5. Expected environmental 0.51 0.45 −0.12*** −0.11*** 0.02 −0.04 1.00change6. CEO respondent 0.58 0.50 0.27*** −0.01 −0.09*** 0.27*** −0.01 1.007. Individualism 76.91 20.53 0.06* 0.12*** −0.09*** 0.04 −0.09** −0.06* 1.008. Uncertainty avoidance 59.01 20.13 −0.05* −0.12*** 0.06* −0.05 0.14*** 0 .07** −0.59*** 9. Masculinity 32.35 12.63 −0.02 0.04 0.04 0.08** −0.08** −0.08** −0.07** −

10. Power distance 59.80 12.19 −0.07* −0.12*** 0.08** −0.06* 0.19*** 0.04 −0.78*** 11. Long-term orientation 47.30 13.87 −0.02 −0.08** 0.04 0.05 0.04 0.01 −0.81***

* p 0.05; ** p 0.01; *** p 0.001; N = 1540




analyses collectively; rather, due to high intercorre- tations toward strategic change, once culturalvalues are introduced it does not affect theirlations (consistent with Hofstede, 1980), each was

examined via an individual regression model. orientation toward change in leadership profiles.With the effects of control variables examined,Examining control variables first, results unam-

biguously confirm prior findings by Hambrick and we turn to an examination of the impact of cultural values on executive CSQ. Hypothesis 1colleagues (1993) with regard to firm perform-

ance, expected environmental change, and CEO posited that individualist values would be posi-tively related to attachment to existing organiza-status. As indicated in Table 2, current perform-ance is positively related to both leadership and tional profiles. Multivariate results confirm this

expectation, with positive and significant resultsstrategy CSQ ( p 0.001). This suggests thatexecutives who view their firm’s performance observed for both leadership CSQ ( p 0.05) and

strategy CSQ ( p 0.001). Thus, it appears thatfavorably maintain the greatest confidence in(commitment to) existing organizational profiles. executives socialized to cultural values encour-

aging strong leadership attributions are moreResults for expected degree of environmentalchange are also consistent with earlier research, likely to resist change in organizational profiles.

Hypothesis 2 addressed the value dimension of demonstrating a negative relationship with bothtypes of CSQ. They suggest that the greater the uncertainty avoidance, arguing that it would be

positively associated with executive CSQ. Resultsexpected change in external contingencies, the

greater the perceived need to adjust both leader- indicate a negative relationship between uncer-tainty avoidance and both leadership ( p 0.01)ship and strategy profiles across the international

pool of executives sampled. Finally, the dummy and strategy CSQ ( p 0.001), suggesting that itis executives socialized to values of uncertaintyvariable designating CEO respondent is shown to

hold a positive relationship with leadership CSQ tolerance who most often persist with existingpolicies. Thus, contrary to expectations, uncer-( p 0.001), providing further evidence of CEOs’

proclivity toward self-cloning (Hambrick et al., tainty avoidance values appear to induce greateropenness toward change, while uncertainty toler-1993; Levinson, 1974). It is not, however, sig-

nificant for strategy CSQ, suggesting that relative ance values foster the patience required to per-severe with earlier chosen courses of action.to other executives CEOs are no more prone to

steadfast adherence to existing strategic policies. Per Hypothesis 3, masculine values wereexpected to be negatively related to commitmentIn considering the final control variable—

industry tenure—the role of executives’ social to the status quo. Multivariate tests show thatthis value dimension does not have a significantcontext is introduced. Prior study by Hambrick

et al. (1993)—limited to U.S. executives— effect on either strategy or leadership CSQ, sug-gesting that values attributed to gender fail toobserved a significant positive relationship

between length of industry experience and both substantively contribute to the shaping of execu-tives’ strategic and leadership mindsets.types of CSQ.5 The findings of this study confirm

that executive tenure in the industry is positively Hypothesis 4 considered cultural values of power distance, positing that they would be posi-and significantly related to strategy CSQ. Interest-

ingly, however, once cultural values are con- tively related to executive CSQ. While regressionanalyses controlling for other determinants indi-trolled, industry tenure fails to demonstrate a

significant relationship with leadership CSQ. cate significant associations with both leadership( p 0.05) and strategy CSQ ( p 0.001), theyThus, while industry experience contributes sig-

nificantly to the shaping of executives’ orien- reveal that the relationship between power dis-tance and CSQ is a negative one. Thus, whilehigh power distance values reflect preferences for5 As noted earlier, Hambrick et al. (1993) also observed firm

tenure to be related to executive CSQ; however, its impact hierarchical structures and centralized decision-was found to be significantly less than that of industry tenure. making (Hofstede, 1980), they do not precludeIn separate analyses not reported here, these findings were

executive openness to adjustments in organiza-generally confirmed, with results for firm tenure reflecting asimilar pattern to those reported above for industry tenure. tional profiles. In fact, results indicate that inAgain, however, the effects of firm tenure were less signifi- high power distance cultures, wherein there existcant. In light of these findings, as well as as the fact that

clear distinctions in power and authority, man-firm tenure is nested in industry tenure, we focus on thelatter determinant. agers are more amenable to changes in policy.




Hypothesis 5 then proposed that a long-term values embedded within cultures play in shapingtop executives’ strategic and leadership mindsets.orientation would be negatively related to execu-

tive commitment to the status quo. Models V of Our findings demonstrate that cultural values sig-nificantly affect executives’ openness towardTable 2 report findings for this value dimension.

As expected, they indicate a negative relationship change in the organizational status quo, evenafter controlling for earlier-observed determinantsbetween long-term values and both measures of

CSQ after controlling for other observed determi- such as experiential background. In doing so,they offer some insight into the reasons for cross-nants, though significance is only achieved forstrategy CSQ ( p 0.01). Together, these results cultural variation in executives’ responses to their

environments. At the same time, a broader contri-suggest that executives whose background cul-tures emphasize a long-term perspective are more bution is made insofar as our results provide

empirical support for assertions that values influ-likely to recognize the need to adjust existingstrategic policies, though they are not necessarily ence the strategic choice process (Hambrick and

Mason, 1984; Hambrick and Brandon, 1988).more open to change in leadership profiles.As a final note, attention is drawn to the

differential effects of industry tenure and culturalWhich cultural values matter?

values on executive CSQ. The multivariate analy-ses in Table 2 reveal a pattern that was not In examining this study’s findings directly, per-

haps the most straightforward are results showinghypothesized, yet holds the potential for signifi-cant importance to the study of strategic leader- that individualist values contribute to strong

executive attachment to existing firm policies.ship. The analyses show that in terms of varianceexplained, the effects of cultural values are no Whereas scholars earlier surmised that executives

commonly develop a vested interest in the poli-less salient than those of experiential background.In fact, where significant, cultural values sur- cies they have helped to effect, this tendency

was most often attributed to self-interest and themount industry tenure in predicting executiveCSQ, and do so substantively in analyses of preservation of power (Pfeffer, 1981; Vancil,

1987). The findings reported here join Hambrick leadership CSQ. Thus, while executives are sub- ject to a host of socialization pressures over the et al.’s (1993) in suggesting that more subtle

factors associated with executives’ social contextcourse of their careers (e.g., acculturation to firmpractices and industry ‘recipes’), the imprint of are also at play. In this case, our analyses reveal

that cultural values which affirm individual auton-their cultural heritage is not suppressed. Rather,its effects are enduring, affecting executives’ per- omy and achievement, leading to strong leader-

ship attributions (Jackofsky and Slocum, 1988),ceptions of appropriate strategy and leadershipprofiles even through the often long ascension to tend to foster among senior managers a sense of

ownership and accompanying reluctance to altersenior ranks.organizational profiles.

Our findings also indicate greater commitmentto strategic policies among managers whose cul-DISCUSSIONtural heritage emphasizes a short-term orientation(or low Confucian dynamism values). HofstedeResearchers, as well as practitioners, have long

suspected that national culture influences execu- (1991) noted that individuals who are stronglyoriented toward the short term often experiencetive thought and action. However, with limited

exception (e.g., Hitt, Tyler, and Park, 1990; difficulty envisioning the future. Their views andperspectives do not extend far into the future,Schneider and De Meyer, 1991), empirical inves-

tigation of the relationship between national cul- and their chosen course of action tends to reflecttraditional mores. Our results extend these ober-ture and executive strategic orientation has been

wanting. What’s more, the few studies that have vations, demonstrating that social tendencieswhich encourage a reflective stance ultimatelybeen undertaken, while ascertaining the existence

of significant cross-cultural differences, fail to reduce executives’ ability to sense the need toadapt strategic profiles.identify the processes or factors underlying this

variation. In the present study, our aim was to Two of our findings, nevertheless, underscorethe complexity of cultural values: the ‘black box’address this void in part by examining the role




of executive mindsets, and their interrelations— social divisions ( Hofstede, 1980). While it wasexpected that managerial interest in the preser-referring to the unexpected direction of results

for values of uncertainty avoidance and power vation of power (differences) would promotestronger adherence to existing policies, resultsdistance. At first glance, it may seem counterin-

tuitive that values of uncertainty avoidance, typi- indicate that high power distance values are asso-ciated with less resistance to change in the statuscally associated with preferences for stability and

predictability, would be negatively related to quo. Thus, in societies where there exist clearpower imbalances, managers demonstrate acommitment to existing strategic and leadershipprofiles. After all, adherence to established prac- greater willingness to alter existing organizational

profiles. One possible explanation for this findingtice (CSQ) is adherence to a known (i.e., certain)course. It infers stability. Further, it is consistent is that in high power distance cultures mech-

anisms at the societal level (e.g., class structures)with threat-rigidity arguments, which suggest thatreliance on well-learned or dominant responses is ensure the continuance of executives’ status and

position; consequently, executives need not resorta favored means of coping with uncertainty andperceived threat (Staw, Sandelands, and Dutton, to organization-level means such as adherence to

the status quo for this purpose. In fact, with1981). Yet the adaptation literature suggests thatadherence to earlier-effected policies often poses contestability of their power and position limited,

executives apparently sense a greater freedom togreater risk—in effect, induces more

uncertainty—than does change. Theorists includ- envision and implement novel policies. Restated,high power distance values seem to confer oning Thompson (1967) and Pfeffer and Salancik

(1978) argue that to enhance their survival pros- executives’ greater latitude of action—or mana-gerial discretion (Hambrick and Finkelstein,pects organizations must engage in adaptation and

adjustment. Our results indicate that executives 1987). Such interpretation is consistent with find-ings in the innovation championing literature.whose background cultures are characterized by

uncertainty avoidance values tend to subscribe Namely, researchers have observed that successfulchampions often perceive little sense of personalto the latter perspective. Namely, in an era of

globalization and technological revolution, these risk in advancing their innovations (Howell andHiggins, 1990). High power distance valuesexecutives seem to be attempting to reduce their

uncertainty through a posture of adaptation. appear to contribute to a sense of political buffer-ing, which in turn facilitates an openness to newRather than steadfastly adhere to earlier-effected

policies—and cope with the risks and uncer- or different initiatives.Finally, the only cultural value dimensiontainties a changing environment poses—

executives socialized to uncertainty avoidance found not to be significantly related to executiveCSQ was masculinity–femininity. Inasmuch asvalues seem to favor adjustment.

Interestingly, these observations are consistent this dimension refers to gender roles and theattributes typically ascribed them—factors notwith the conclusions reached by Schneider and

De Meyer (1991). In their investigation, they generally associated with strategic orientationsand decision processes—the lack of significantfound that members of a high uncertainty avoid-

ance culture (Latin Europeans) were more likely findings may be less than surprising. For thatmatter, these results support some scholars’ omis-to recommend proactive behavior in response to

an environmental change than members of other sion of masculinity–femininity in models linkingnational culture and strategic decision-makingcultures. Their results led them to surmise that

cultures do not so much differ in uncertainty (e.g., Schneider, 1989).avoidance per se, but rather in their preferredapproaches to dealing with uncertainty. Clearly,

Cultural values vs. experiencefurther research into this value dimension and itsimplications for decision-making is warranted. The findings reported above offer compelling evi-

dence in support of the view that cultural valuesSimilarly, the direction of findings for powerdistance values was unanticipated. As noted ear- help to shape the orientations top executives bring

to their roles as organization leaders and strategiclier, this value dimension captures the extent towhich societal members assume an uneven distri- decision-makers (Hambrick and Mason, 1984;

Hambrick and Brandon, 1988; Schneider, 1989).bution of power often associated with underlying




To summarize, cultural values of individualism, managers of differing background, but also in thedeterminants giving rise to them. Finally, the(low) uncertainty avoidance, (low) power dis-

tance, and short-term orientation were found to findings reaffirm the need for further consider-ation of the role executive values play in strategicconstitute significant determinants of executive

CSQ, even after controlling for earlier-observed leadership (e.g., Finkelstein and Hambrick, 1996;Hambrick and Brandon, 1988). In restrictingdeterminants including current performance,

expected environmental change, and industry ten- focus to demographic variables such as experien-tial background, researchers appear to be over-ure. What bears special attention is that theimpact of these cultural values is no less than looking an important set of factors which affect

leadership activity.the impact of experiential background. In fact,the analyses show that cultural values are often Of course, the analyses also suggest that the

effect of cultural values (and previous experience)stronger predictors of executive CSQ. Forexample, when cultural values are controlled, should not be overstated. That is, while the results

demonstrate that the influence of cultural valuesindustry tenure remains a significant determinantof strategy CSQ, but it no longer constitutes a surmounts that of either firm or industry tenure,

their effects are not overwhelming. This suggestssignificant predictor of leadership CSQ.6 Thus,while both prior experience and cultural sociali- that much remains to be learned about the factors

which shape executives’ mindsets, and executivezation contribute to the shaping of executives’

strategic mindsets, it is cultural values which CSQ, in particular. A definitive model of itsdeterminants would clearly be useful to bothshape executives’ views of appropriate leadership

profiles. What’s more, a comparison of coef- research and practice; however, it is beyond thescope of this investigation. Therefore, furtherficients reveals that, on average, these four cul-

tural values explain greater variance in execu- research is needed into the other influences withwhich culture and firm and industry experiencetives’ commitment to the strategic and leadership

status quo than does tenure. must compete. For example, researchers mightconsider the effects of such factors as personalityThis pattern of findings raises a number of

important issues. First, contrary to popular characteristics, as well as personal and pro-fessional motivations to name but a few.assertions (e.g., Jacob, 1994), it appears that

executives’ cultural identity is not lost over time, It is also important to acknowledge the limi-tations of this investigation. The first stems fromnor is it overshadowed by professional accultur-

ation associated with firm or industry experience. reliance on a single cultural value typology.Future research should consider the use of otherRather, the values embedded in national culture

seem to have a profound and enduring effect on cultural value typologies, both as a means of confirming the relationship between culturalexecutives’ orientations, independent of the logics

and wisdom accrued in managerial development. values and executive mindsets, as well asdeveloping a richer understanding of the culturalMore broadly, the results suggest that earlier

findings concerning the determinants of executive value dimensions which contribute to executives’cognitive make-up. At the same time, bothorientation cannot be assumed generalizable

across cultures. For example, while Hambrick et researchers and practitioners would benefit fromstudy which examines other types of values—al. (1993) presented clear evidence that industry

tenure is a critical determinant of both leadership including, for example, theoretical or politicalvalues (e.g., Finkelstein and Hambrick, 1996)—and strategy CSQ among U.S. executives, their

findings must be cautiously applied to managers as cultural values constitute but a subsegment of the many which together comprise executives’of differing cultural background. Similarly, the

conclusions reached in other research should be value orientations.A second limitation surrounds this study’s sam-examined for cultural or ethnocentric biases

(Hickson, 1996), as important differences appear ple. The focus here is predominantly on the seniorexecutive leadership of large firms. Consequently,to exist not only in the mindsets and choices of our findings may not be generalizable to execu-tives of smaller organizations. Similarly, our

6 The same pattern—both in terms of significance and varianceresults may not apply to younger (more junior)explained—was observed for firm tenure in analyses not

reported here. managers. It may be the case that managers of




later generations do not adhere as closely to nationally, economies and general market con-ditions may be converging, but as our resultstraditional values as do their more senior counter-

parts. Thus, research which considers the effects indicate, significant differences still characterizethe mindsets of top executives of differing cul-of cultural values on more junior managers would

be useful, not only to assess generalizability, but tural background. This suggests that firms whichseek to develop an international cadre of execu-also to expand our appreciation of the impli-

cations of cultural values at multiple career stages tives free of cultural predispositions (e.g.,Edstrom and Galbraith, 1977) face formidableand managerial levels.challenge. Given the salient effects of culturalsocialization, firms might be better advised to

Implications for practiceinstill a cultural empathy and understandingamong executives, while simultaneously adoptingThe study’s findings raise some important impli-

cations for practitioners. Perhaps the most organizational mechanisms which tap into theadvantages of a culturally diverse managementimportant of these is that the results show that

executives of differing cultural backgrounds are group.not equally open to change. Rather, in accordancewith their culture’s values, executives maintainvarying levels of commitment to established poli- ACKNOWLEDGEMENTS

cies. This finding is likely to affect managerialdecision-making in numerous transnational con- Thanks are owed Don Hambrick, Jim Fredrick-

son, and Korn/Ferry International for sharing thetexts. For example, within multinational organiza-tions where knowledge flows across international data base employed here. The paper has benefited

greatly from the support and suggestions providedsubsidiaries are critical to success (e.g., Guptaand Govindarajan, 1991), recognition of differ- by Sylvia Black, as well as thoughtful comments

by Don Hambrick, Aneil Mishra, Ed Zajac, andences in CSQ tendencies might reduce impedi-ments to organizational learning and information two anonymous reviewers.transfer. Likewise, coordinated decision-makingand communication across firms of different

REFERENCESnational origin—for example, between joint ven-ture partners—might be improved if advance con- Aldrich, H. (1979). Organizations and Environments.sideration is given to culturally based propensities Prentice-Hall, Englewood Cliffs, NJ.

Andrews, K. (1971). The Concept of Corporate Strat-(dis)favoring change. In fact, awareness of differ-egy. Dow Jones-Irwin, Homewood, IL.ences in CSQ tendencies might lead to more

Berger, P. L. and T. Luckmann (1967). The Socialappropriate selection of outside partners,Construction of Reality. Doubleday, New York.

especially critical in dynamic environments where Child, J. (1972). ‘Organization structure, environment,adaptation to environmental shifts is key. and performance: The role of strategic choice’, Soci-

ology, 6, pp. 1–22.Attention to culture-based differences in mana-Cyert, R. M. and J. G. March (1963). A Behavioralgerial perspectives is also relevant to top manage-

Theory of the Firm. Prentice-Hall, Englewoodment team composition. At a time of increasingCliffs, NJ.

globalization, both in firm-level activity and Edstrom, A. and J. Galbraith (1977). ‘Transfer of man-executive team make-up, organizations headed by agers as a coordination and control strategy in multi-

national organizations’, Administrative Sciencea managerial group whose members are drawnQuarterly, 22, pp. 248–263.exclusively from cultures resistant to change may

England, G. W. (1967). ‘Personal value systems of face a priori impediments to adaptation. SuchAmerican managers’, Academy of Management Jour-

teams are likely to be unable to effectively cope nal, 10, pp. 53–68.with changing contingencies. Consequently, a England, G. W. (1975). The Manager and his Values.

Ballinger, Cambridge, MA.team comprised of members whose orientationsFinkelstein, S. (1992). ‘Power in top managementbalance one another would seem most effective

teams: Dimensions, measurement, and validation’,over the long term. Academy of Management Journal, 35, pp. 505–538.

Finally, the findings suggest that, at least in Finkelstein, S. and D. C. Hambrick (1996). Strategicthe short term, the idea of a culture-free executive Leadership: Top Executives and Their Effects on

Organizations. West Publishing, St. Paul, MN.is but a myth (e.g., Hofstede, 1991). Inter-




Gupta, A. and V. Govindarajan (1991). ‘Knowledge Jackofsky, E. F. and J. W. Slocum ( 1988). ‘CEO rolesacross cultures’. In D. C. Hambrick (ed.), Theflows and the structure of control within multi-

national corporations’, Academy of Management Executive Effect: Concepts and Methods for StudyingTop Managers. JAI Press, Greenwich, CT, pp. 67– Review, 16, pp. 768–792.

Guth, W. D. and R. Tagiuri (1965). ‘Personal values 99.Jackofsky, E. F., J. W. Slocum, and S. J. McQuaidand corporate strategy’, Harvard Business Review,

43, pp. 123–132. (1988). ‘Cultural values and the CEO: Alluringcompanions?’, Academy of Management Executive,Hage, J. and M. Aiken (1970). Social Change in

Complex Organizations. Random House, New York. 2, pp. 39–49.Jacob, R. (7 February 1994). ‘America’s best?’, For-Hage, J. and R. Dewar (1973). ‘Elite values versus

organizational structure in predicting innovations’, tune, 129, p. 54.Kets de Vries, M. and D. Miller (1986). ‘Personality, Administrative Science Quarterly, 18, pp. 279–290.

Hambrick, D. C. (1983). ‘High-profit strategies in culture, and organization’, Academy of Management Review, 11, pp. 266–279.mature capital goods industries: A contingency

approach’, Academy of Management Journal, 26, Kimberly, J. R. and R. E. Quinn (1984). ManagingOrganizational Transitions. Richard D. Irwin,pp. 687–707.

Hambrick, D. C. and G. Brandon (1988). ‘Executive Homewood, IL.Kluckhohn, F. R. and R. L. Strodtbeck (1961). Vari-values’. In D. C. Hambrick (ed.), The Executive

Effect: Concepts and Methods for Studying Top ations in Value Orientations. Row, Peterson, Evan-ston, IL. Managers. JAI Press, Greenwich, CT, pp. 3–34.

Hambrick, D. C. and S. Finkelstein (1987). ‘Managerial Kogut, B. and H. Singh (1988). ‘The effect of nationalculture on the choice of entry mode’, Journal of discretion: A bridge between polar views on organi-

zations’. In B. Staw and L. L. Cummings (eds.), International Business Studies, 19, pp. 411–432.Kotter, J. P. (1988). The Leadership Factor . Free Press, Research in Organizational Behavior , Vol. 9. JAI

Press, Greenwich, CT, pp. 369 –406. New York.Levinson, H. (1974). ‘Don’t choose your own suc-Hambrick, D. C., M. A. Geletkanycz and J. W. Fred-

rickson (1993). ‘Top executive commitment to the cessor’, Harvard Business Review, 52, pp. 53–62.Levinson, H. (1980). ‘Criteria for choosing chief execu-status quo: Some tests of its determinants’, Strategic

Management Journal, 14 (6), pp. 401–418. tives’, Harvard Business Review, 58, pp. 113–120.Lodge, G. C. and E. F. Vogel (eds.) (1987). IdeologyHambrick, D. C. and P. Mason (1984). ‘Upper ech-

elons: The organization as a reflection of its top and National Competitiveness. Harvard BusinessSchool Press, Boston, MA.managers’, Academy of Management Review, 9,

pp. 193–206. March, J. G. and H. A. Simon (1958). Organizations.Wiley, New York.Harrigan, K. R. (1985). Strategic Flexibility. Lexington

Books, Lexington, MA. Meindl, J., S. Ehrlich, and J. Dukerich (1985 ). ‘Theromance of leadership’, Administrative ScienceHickson, D. J. (1996). ‘The ASQ years then and now

through the eyes of a Euro-Brit’, Administrative Quarterly, 30, pp. 78–102.Milliken, F. J. and T. K. Lant (1991). ‘The impactScience Quarterly, 41, pp. 217–228.

Hitt, M. A., B. B. Tyler, and D. Park (1990). ‘A cross- of an organization’s recent performance history onstrategic persistence and change: The role of mana-cultural examination of strategic decision models:

Comparison of Korean and U.S. executives’, Acad- gerial interpretations’. In P. Shrivastava, A. Huff andJ. Dutton (eds.), Advances in Strategic Management ,emy of Management Best Papers Proceedings,

pp. 111–115. Vol. 7. JAI Press, Greenwich, CT, pp. 129–156.Mintzberg, H., D. Raisinghani, and A. Theoret (1976).Hofstede, G. (1980). Culture’s Consequences. Sage,

Beverly Hills, CA. ‘The structure of unstructured decision processes’, Administrative Science Quarterly, 21, pp. 246–275.Hofstede, G. (1991). Cultures and Organizations:

Software of the Mind . McGraw-Hill, New York. Norburn, D. (1987). ‘Corporate leaders in Britain andAmerica: A cross-national analysis’, Journal of Hofstede, G. (1993). ‘Cultural constraints in manage-

ment theories’, Academy of Management Executive, International Business Studies, 18, pp. 15–32.Pearce, J. A. and S. A. Zahra (1991). ‘The relative7, pp. 81–94.

Hofstede, G., B. Neuijen, D. D. Ohayv, and G. Sanders power of CEOs and boards of directors: Associationswith corporate performance’, Strategic Management (1990). ‘Measuring organizational cultures: A quali-tative and quantitative study ascross twenty cases’, Journal, 12 (2), pp. 135–153.

Pennings, J. (1993). ‘Executive reward systems: A Administrative Science Quarterly, 35, pp. 286–316.Hoppe, M. (1990). ‘A comparative study of country cross-national comparison’, Journal of Management

Studies, 30, pp. 261–280.elites: International differences in work-relatedvalues and learning and their implications for man- Pettigrew, A. (1985). The Awakening Giant . Basil

Blackwell, Oxford.agement training and development’, unpublished dis-sertation, University of North Carolina—Chapel Pfeffer, J. (1981). Power in Organizations. Ballinger,

Cambridge, MA.Hill.Howell, J. M. and C. A. Higgins (1990). ‘Champions of Pfeffer, J. and G. Salancik (1978). The External Con-

trol of Organizations: A Resource Dependence Per-change: Identifying, understanding, and supportingchampions of technological innovations’, Organiza- spective. Harper & Row, New York.

Porter, M. E. (1980). Competitive Strategy. Free Press,tional Dynamics, 18, pp. 40–55.

New York.




Ronen, S. and O. Shenkar (1985). ‘Clustering countries Shane, S., S. Venkataraman, and I. MacMillan (1995).‘Cultural differences in innovation championing stra-on attitudinal dimensions’, Academy of Management

Review, 10, pp. 435–454. tegies’, Journal of Management , 21, pp. 931–952.Simon, H. A. (1957). Administrative Behavior . Macmil-Schein, E. H. (1985). Organizational Culture and Lead-

ership. Jossey-Bass, San Francisco, CA. lan, New York.Spender, J.-C. (1977). ‘Managerial judgement as theSchneider, S. C. (1985). ‘Strategy formulation: The

impact of national culture. The case of France’, basic issue of organizational strategy making’,unpublished working paper, Manchester Businesspaper presented at the Northeast Regional Meeting

of the Academy of International Business, Boston, School.Staw, B. M. and J. Ross (1978). ‘Commitment to aMA.

Schneider, S. C. (1989). ‘Strategy formulation: The policy decision: A multi-theoretical perspective’, Administrative Science Quarterly, 23, pp. 40–64.impact of national culture’, Organization Studies,

10, pp. 149–168. Staw, B., L. E. Sandelands, and J. E. Dutton (1981).‘Threat rigidity cycles in organizational behavior’,Schneider, S. C. and A. De Meyer (1991). ‘Interpreting

and responding to strategic issues: The impact of Administrative Science Quarterly, 26, pp. 501–524.Thompson, J. (1967). Organizations in Action.national culture’, Strategic Management Journal,

12 (4), pp. 307–320. McGraw-Hill, New York.Van Maanen, J. and A. Laurent (1993). ‘The flowShackleton, V. and A. Ali (1990). ‘Work related values

of managers: A test of the Hofstede model’, Journal of culture: Some notes on globalization and themultinational corporation’. In S. Ghoshal and D. E.of Cross-Cultural Psychology, 21, pp. 109–118.

Shane, S. A. (1993). ‘Cultural influences on national Westney (eds.), Organization Theory and the Multi-national Corporation. St. Martin’s Press, New York,rates of innovation’, Journal of Business Venturing,

8, pp. 59–73. pp. 275–312.Vancil, R. (1987). Passing the Baton: Managing theShane, S. A. (1995). ‘Uncertainty avoidance and the

preference for innovation championing roles’, Jour- Process of CEO Succession. Harvard BusinessSchool Press, Boston, MA.nal of International Business Studies, 26, pp. 47–68.

APPENDIX 1: SURVEY ITEMS AND SCALING METHOD

Leadership CSQ

A. CEO expertise B. CEO behaviors

1. Accounting/finance 1. Frequently communicates with employees2. Marketing/sales 2. Frequently communicates with customers3. Production/operations 3. Personally makes all major decisions4. Science/technology/R&D 4. Promotes management training and development5. International economics and 5. Rewards loyalty and length of service

politics 6. Actively plans for executive succession6. Human resource management 7. Closely links compensation to individual performance7. Foreign languages 8. Readily reassigns/terminates individuals who do not meet8. Media skills/public speaking objectives9. Negotiation and conflict 9. Frequently uses outside consultants

resolution 10. Delegates substantial authority

10. Strategy formulation 11. Frequently visits outlying plants/offices11. Computer literacy 12. Is personally involved in community public affairs.

13. Emphasizes international outlook 14. Maintains lean staff 15. Sets personal example of cost-consciousness




Strategy CSQ

A. Competitive edge B. Growth strategies

1. Low price 1. Acquisitions in industries new to the firm

2. Quality products/services 2. Acquisitions in industries the firm already participates in3. Premium image 3. Internal development of new businesses4. New products/services 4. Internal development of new products/services in existing5. Customer service businesses6. Distribution network 5. Development of new geographic (including international7. Promotion /advertising markets )8. Timely/reliable delivery 6. Increased market share in existing products/markets9. Product styling/features 7. Joint ventures with other firms

10. Technology11. Productivity

For purposes of scaling, the Competitive edge, Growth strategies, and CEO expertise sections all employed a forced-choice scalingsystem, with possible scores ranging from 1 to 5. In answering Competitive edge and Growth strategy items, respondents were

asked to select which three alternatives were more important, and which three were less important to their firms in years 1988 and2000. From those items selected respondents then identified which single option was most important, and which least important.These choices, respectively, received scores of 5 and 1. The other two selections noted as more important received a score of 4,while the remaining less important items received a value of 2. Finally, those items not identified as either very important or notimportant, hence of average importance, scored a value of 3.

The CEO behaviors segment was scaled in Likert-type manner, also employing a 5-point scale. In this section, respondents wereasked to describe how closely the questionnaire items described the current CEO and ideal CEO (for the same firm) of the year2000: Given alternatives ranged from ‘not at all’, which received a score of 1, to ‘extremely’ applicable, with a score of 5.

APPENDIX 2: SAMPLED COUNTRIES’ SCORES ALONG HOFSTEDE’SCULTURAL DIMENSIONSa

Uncertainty Long-termIndivisualism avoidance Masculinity Power distance orientation

Argentina 46 86 56 49 –Australia 90 51 61 36 31Belgium 75 94 54 65 –Brazil 38 76 49 69 65Canada 80 48 52 39 23France 71 86 43 68 –Germany 67 65 66 35 31Italy 76 75 70 50 –Japan 46 92 95 54 80

Mexico 30 82 69 81 –Netherlands 80 53 14 38 44Norway 69 50 8 31 –Singapore 20 8 48 74 48South Korea 18 85 39 60 75Spain 51 86 42 57 –Switzerland 68 58 70 34 –Thailand 20 64 34 64 56United Kingdom 89 35 66 35 25United States 91 46 62 40 29Venezuela 12 76 73 81 –

culture and commitment to statusquo

Documents