Why Don’t Multi-National Initiatives Always Work Equally in All Locations?

While a desire to behave ethically (or at least be perceived as behaving ethically) marks most big companies, the execution often occurs in an uneven distribution. Is that because of something from the top? The bottom? The local culture? This paper by Danna Booyens Strydom, “Ethical leadership and performance: The effect of follower individualism-collectivism,” appearing in the International Journal of Cross Cultural Management, sets out to answer some of those questions while noting that past answers focused solely on execution aren’t revealing the whole story. In the post below, Strydom, with the University of Pretoria’s Gordon Institute of Business Science, examines several multinationals operating in South Africa to gather data, noting as he does that “Africa is a useful context for theory development as it is not only understudied, but also characterized by very different types of business relationships.” He talks about his research in a Q&A that appears below the paper’s abstract.

This study seeks to understand how cultural value orientation – specifically individualism/collectivism – influence the relationship between ethical leadership and employee behaviour. Social cognitive theory was used to explain how cultural value orientations change the social learning process associated with ethical leadership. Using matched multi-source sample data from managers and subordinates of a South African multinational operating in several African countries, supplemented with objective performance data, ethical leadership was found to be positively related to both in- and out-of-role performance. However, horizontal collectivism positively moderated the relationship between ethical leadership and organizational citizenship behaviour, while horizontal individualism and vertical collectivism negatively moderated it. Leadership research and theory will benefit from a greater emphasis on follower characteristics, as differences in the cultural value orientations of employees affect the effectiveness of ethical leadership. Awareness of this difference also stands to benefit organizations.

What motivated you to pursue this research?

Having spent several decades in multinational leadership roles it became clear to me that leadership is critical in determining enterprise success. Not just at the CEO level, but also lower down the levels. So how to identify and develop leadership potential is one of the most critical questions for any enterprise? This triggered my interest in studying and researching leadership.

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

The enterprise had experienced governance issues in some territories and efforts to roll out a global ethical conduct program proved less effective in certain parts of the world than in others. This could not just be ascribed to local execution or lack thereof, so I became intrigued to understand and explain this. This search led to cross-cultural studies and I was surprised to find that with few exceptions, leadership research and cross-cultural research seemed to exist in separate worlds.

What has been the most challenging aspect of conducting your research?

Finding suitable target companies to conduct the research in was the single biggest challenge. While engaging with senior executives, to seek permission to conduct the study in their business, one could sense the apprehension in the body language as soon as ethical leadership was mentioned. Sasol, Old Mutual, Sappi, MTN and Tyco International all declined to participate yet espouse their governance and ethical conduct programs.

Were there any surprising findings?

The individual level cultural values did not significantly moderate the relationship between ethical leadership and employee task performance. This is a complex relationship which may not be directly moderated but rather indirectly through intermediate variables. It is also well known that these moderating effects are typically of small effect size and the sample may not have had enough power to detect this.

In what ways is your research innovative, and how do you think it will impact the field?

There are few studies employing continuous variable moderation with structured equation modelling, so this is somewhat of an innovation at the methodological level.  Follower characteristics is not widely considered in leadership theories. This research demonstrates that the impact of leadership is not consistent across culturally diverse employee populations. Therefore, follower characteristics may have a significant impact on a specific leadership theory. Future leadership research should therefor investigate this impact for other leadership theories.

What advice would you give to new scholars and incoming researchers in this particular field of study?

The field of cross-cultural research covers a wide suite of research methods, backgrounds and even epistemologies. Gaining a wide and comprehensive familiarity and understanding of as many of these will be well rewarded with insight well beyond just to select the most appropriate context or method for the research question under study.