Cultures have consequences: A configural approach to leadership across two cultures

Case studies

Cultures have consequences: A configural approach to leadership across two cultures

Global research, November 2014

Does culture have consequences for organisational change? This research explores the impact of culture and cultural values on employee commitment to organisational change. The results suggest that organisations should take a more tailored approach to change that accounts for differences between, and also within, cultures. By Juliet Bourke - Consulting, Partner.

Deloitte’s 2015 report “Global HC Trends 2015 – Leading in the new world of work” observed that in order to compete, global businesses should “manage people locally – reflecting local culture, local labor markets and the needs of diverse local business units”. This statement reflects the increasing realization that cultures have consequences, and that a global one-size-fits all approach may not keep a global workforce engaged and committed. What we have yet to understand is the impact of culture on attitudes towards organisational change. Does an employee’s cultural values impact their attitudes towards change? Do we need to manage change differently for staff in different countries?

This gap in our understanding prompted Associate Professor Kyootai Lee (Sogang University, Korea), Professor Terri Scandura (University of Miami, USA) and Associate Professor Monica Sharif (San Francisco State University, USA) to explore the impact of country and cultural values on organisational change. Importantly, the researchers found that culture has consequences on attitudes towards organisational change – but that the impact of culture cannot be generalised to country or cultural values alone. Instead, organisations should take a more tailored approach to strategic change that accounts for the differences between cultures, but also differences within cultures.

Aim

This research aimed to explore the impact of both national culture (USA or Korea) and cultural values (power distance and collectivism) on commitment to organisational change. The research considered both the extent to which employees are consulted on change (consultation) and whether leaders were socially supportive and shared valuable information with employees (leader-member exchange).

Method

The authors surveyed a total of 445 employees from Korea and the USA who had experienced organisational change. It was hypothesised that an employee’s country (USA or Korea) and cultural values (power distance and collectivism) would impact their commitment to organisational change, considering the level of leader-member exchange and consultation.

Findings

This research demonstrates that organisations are unlikely to have a complete understanding of the consequence of culture on organisational change if they only consider the impact of differences between countries or cultures. Instead, organisations need to consider both the differences within and between countries. Three key questions were considered:

1.  Are there differences in values within countries? There were no differences in employee commitment to change when comparing the USA and Korea. There were, however, some key differences in organisational behaviors. Employees in the USA were more likely than Korean staff to feel comfortable disagreeing with their supervisors (low power distance: 3.4 vs 2.8/5), be consulted on organisational change (consultation: 3.4 vs 2.8/5) and feel that their leaders were socially supportive and shared valuable information with staff (high leader-member exchange: 3.5 vs 3.2/5). Interestingly, while many assume that Asian cultures are more collectivist in their values (viewing themselves as more connected to others), there were no differences in collectivism between those in the USA and Korea.

2.  Are there cultural differences in the way employees respond to leaders during change between countries? Despite the cultural differences between the two countries (USA and Korea), employees were more committed to organisational change in both countries where there was high leader-member exchange and they were consulted in the change. That is, leaders will be most successful in engaging employees within the change process if they consult with them, are socially supportive and share valuable information. This relationship was stronger for employees in the USA, indicating that these factors are more important for driving employee alignment to change in the USA than in Korea. Leaders should therefore be aware that while these leadership behaviors will likely increase employee commitment to change across geographies, they may be more effective in some locations than in others.

3.  During times of change do organisations need to consider differences between cultures, or within cultures? According to this research, an employee’s cultural values impact their attitudes towards organisational change, but such values are not entirely dependent on their country. What this means, is that while it is important to consider the cultural differences between countries during change, such an approach only considers half the picture. Instead, leaders need to take a more tailored approach to change to ensure they consider both the individual differences between employees, and the differences between countries. Leaders must therefore consider BOTH the differences within cultures and between cultures.

Implications

This research has important implications for leaders and organisations managing organisational change across different cultures or countries. According to this research, cultural differences impact employee commitment to change, and may therefore be a reason why some multinational organisations have been effective in implementing organisational change in their headquarters, but not in their satellite locations. When planning organisational change, it is therefore necessary to account for differences both between cultures and within cultures. This does not mean relying on local country stereotypes (e.g. assuming that all Asian cultures are collectivist), but instead necessitates a reliance on leaders in local offices, who must consider the cultural values of their workforce and tailor the change approach to both local and individual needs. For example, organisations could establish a change advocacy network across all impacted countries, where change advocates from each country provide local intel to help shape change strategies in their region.


Leaders will be most effective at implementing change where they use different tactics to gain employee commitment to the change depending on the employee, their country and their values. For example, this research suggests that Korean leaders need to encourage those with a high power distance to speak up during organisational change, while those in the USA need to focus on building high quality relationships with those with low power distance.

To read the full article, see Lee, K., Scandura, T. A., Sharif, M. M. (2014). “Cultures have consequences: A configural approach to leadership across two cultures”, The Leadership Quarterly, Vol 25, pp.692-710

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