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The International Journal of Human Resource
Management
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Building effective organizations: transformational
leadership, collectivist orientation, work-related
attitudes and withdrawal behaviours in three emerging
economies
Fred Ochieng Walumbwa & John J. Lawler
Published online: 18 Feb 2011.
To cite this article: Fred Ochieng Walumbwa & John J. Lawler (2003) Building effective organizations: transformational
leadership, collectivist orientation, work-related attitudes and withdrawal behaviours in three emerging economies, The
International Journal of Human Resource Management, 14:7, 1083-1101, DOI: 10.1080/0958519032000114219
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Building effective organizations:
transformational leadership, collectivist
orientation, work-related attitudes and
withdrawal behaviours in three emerging
economies
Fred Ochieng Walumbwa and John J. Lawler
Abstract Previous cross-cultural research on transformational leadership has focused
mainly on replicating the augmentation effects of transformational leadership over
transactional leadership on followers attitudes and behaviours. Relatively few studies
have systematically examined cultural impacts in moderating the inuence of
transformational leadership on work-related outcomes taking a cross-cultural perspective.
Using a eld survey of 577 employees from banking and nancial sectors in three
emerging economies, namely: China, India and Kenya, we examined the moderating effect
of collectivism on the relationships between transformational leadership, work-related
attitudes and perceptions of withdrawal behaviours. Our results found support for the
moderating effect of collectivism on the relationship between transformational leadership
and work-related outcomes, such as facets of job satisfaction, organizational commitment
and perceptions of organizational withdrawal behaviours. In addition, our results lend
support to the view that transformational leadership might be effective across cultures.
The implications of these ndings for future research on transformational leadership and
cross-cultural research are discussed.
Keywords Transformational leadership; cross-cultural research; organizational
commitment; job satisfaction; withdrawal behaviours.
Increased international economic activities, globalization of markets, mobility of
technology and changes in workforce demographics have heightened interest in
understanding and addressing ways of motivating culturally diverse workforces, on the
part of both multinational corporations and indigenous companies. This process is
occurring in developing, as well as more developed economies. This trend towards
increased globalization and workforce diversication raises questions about the extent to
which management and leadership techniques that have been applied in conventional
work settings in industrialized Western economies can be applied effectively in
The International Journal of Human Resource Management
ISSN 0958-5192 print/ISSN 1466-4399 online q 2003 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
DOI: 10.1080/0958519032000114219
Fred Ochieng Walumbwa, University of NebraskaLincoln, Department of Management,
Lincoln, NE 68588 0491, USA (tel: 402 472 3915; fax: 402 472 5855;
e-mail: fwalumbwa@unlnotes.unl.edu). John J. Lawler, Institute of Labor and Industrial
Relations, University of Illinois at Urbana-Champaign, 504 East Armory Avenue, Champaign,
IL 61820, USA (tel: 217 333 6429; fax: 217 244 9290; e-mail: j-lawler@uiuc.edu).
Int. J. of Human Resource Management 14:7 November 2003 10831101
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the emerging markets. For instance, anecdotal research evidence suggests that,
culturally, employees in emerging markets may hold values completely
different from those in developed countries (Kiggundu, 1989). Others have also
questioned the generalizability of Western theories to other cultures (Erez, 1994;
Walumbwa, 1999).
The purpose of the current study is to examine the moderating impact of collectivism
on the relationship between transformational leadership and work-related outcomes in
three emerging market economies, namely: China, India and Kenya. By collectivist
cultural orientation, we refer to societies in which group interests supersede indivi-
dual interests (Chen et al., 1998; Hofstede, 1997; Triandis, 1995). Jung and Avolio
(1999), in a laboratory experiment using Asian and Caucasian students, reported that
collectivists with a transformational leader generated more ideas. Although their study
was in line with recommendations provided by Chen et al. (1998), they used students
to represent cultural differences. These students, with a mean age of 21.5 years, had
been in the United States for an average length of 10.6 years. Therefore, the extent to
which they represented a collectivistic culture is questionable. Further validation of
their results is required in more culturally and occupationally diverse participants
(Jung and Avolio, 1999).
In the present study, we expand on the work of Jung and Avolio (1999) in a eld
setting by focusing on transformational leadership behaviour, collectivism, work-related
attitudes and perceptions of organizational withdrawal behaviours. Researchers, such as
Jung et al. (1995) have specically called for an investigation to examine cultural
impacts on transformational leadership processes in different environments. More
specically, there is extremely limited research on cross-cultural leadership and work-
related outcomes in developing countries, especially in Sub-Saharan Africa (Mendonca
and Kanungo, 1990). Africa is of particular interest because of the immense market
potential it holds for the West. For example, the continent has an estimated total
population of over 700 million. In addition, the continent is in a state of transition. Most
of the large state corporations, formerly owned exclusively by the government, are being
sold to private individuals and foreign companies through the liberalization programmes.
For these companies to operate and compete effectively and efciently, they must
understand the cultural implications involved in motivating employees in this region.
Unfortunately, little is known about how different leadership styles might interact with
cultural orientation to inuence work-related outcomes. This study attempts to bridge
this gap in the literature by expanding research work in this region.
While it is true that other cultural dimensions would also affect the relationship
between transformational leadership and work-related outcomes, in the present study
we focus on collectivism for a number of reasons. First, the construct is one of the most
widely studied in the leadership literature (Adler, 2002). Second, collectivism has been
found to be related to leadership styles and outcomes (Agarwal et al., 1999; House et al.,
1997). Third, collectivism has been of particular interest to cross-cultural researchers
(Triandis, 1995). Besides, previous studies (e.g. Hofstede, 1980, 1997) have shown that
collectivism and power distance dimensions are positively and highly correlated r
:67: Of course, this is not to suggest that other cultural dimensions are unimportant;
rather, this represents a good step in understanding the role of cultural orientation in
leadership process.
Although the individualism/collectivism dichotomy has enjoyed great recognition
(Hofstede, 1997; Triandis, 1995), recent studies have questioned the plausibility of this
dichotomy. For example, contrary to Hofstede (1980) assertion that Singapore is low
in individualism, McKenna and Richardson (1995) found that Singaporeans are
1084 The International Journal of Human Resource Management
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extremely individualistic. Triandis and colleagues (Singelis et al., 1995; Triandis, 1995)
have argued that there are many kinds of collectivism. In the present study, we use
horizontal and vertical social dimensions (e.g. Singelis et al., 1995; Triandis, 1995;
Triandis and Gelfand, 1998), which distinguish among the different kinds of
collectivism. Horizontal collectivism refers to a cultural pattern in which the individual
sees the self as an aspect of the group. That is, the self is seen as totally part of the
group and interdependent with other members of the group, who are viewed as equal and
the same. Vertical collectivism is a cultural pattern in which the individual sees the
self as an aspect of the group, but individual differences within the group
are recognized. Consequently, we do not need data from an individualistic
culture for comparison. Indeed, Pillai et al. (1999) noted that there are cultural
differences in the way that leadership is manifested not only across cultures but also
within cultures.
In summary, the current study contributes to cross-cultural leadership literature by
adding to the limited knowledge base about the cultural inuences on leadership
processes outside North America and Europe. Besides, this is the rst study to
systematically to examine cultural inuence on the relationships between transforma-
tional leadership style and perceptions of individual withdrawal behaviours. Individual
withdrawal behaviours are of interest to researchers because they reect observable
traces of employees underlying attitudes and affect towards their work roles (Hanisch
and Hulin, 1990, 1991). Thus, the current study is likely to shed light on how employees
affect towards work roles can be enhanced.
Theoretical background and hypotheses
Transformational leadership
Until the 1980s, most leadership research focused on transactional leadership (Bass,
1998; Yukl and Van Fleet, 1992). Today, transformational leadership is viewed as the
most prominent topic in the current research and theories of leadership (Bass, 1998;
Pawar and Eastman, 1997). Burns (1978) used the term transforming leadership to refer
to individuals who recognize the existing needs of potential followers, but go further,
seeking to satisfy higher needs to engage the full person of the follower in terms of
Maslows hierarchy of needs (Bass, 1985).
Basss (1985) transformational leadership has four components: charisma,
inspirational motivation, intellectual stimulation and individualized consideration.
Charismatic leaders are extraordinarily gifted people who gain the respect, pride, trust
and condence of followers by transmitting a strong sense of vision and mission
(Gardner and Avolio, 1998). Such leaders excite, arouse and inspire their followers, such
that the relationship between the leader and follower is one based on personal
understanding as opposed to one based on formal, institutional rules, regulations, rewards
or punishments (Bass, 1985). Their communication style is effective because it
encompasses powerful non-verbal tactics that mobilize followers into action by linking
present behaviours to past events (Shamir et al., 1993).
Inspirational motivation is concerned with a leader setting higher standards, thus
becoming a sign of reference (Bass, 1985). Such leaders provide an emotional appeal to
increase awareness and understanding of mutually desired goals among followers (Bass,
1985). Inspirational leaders behave in ways that motivate and inspire those around them
by providing meaning and challenge to followers work (Bass, 1985). Such leaders also
demonstrate self-determination and commitment to attaining objectives and present an
optimistic and achievable view of the future (Dubinsky et al., 1995).
Walumbwa and Lawler: Building effective organizations 1085
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Intellectually stimulating leaders challenge followers to think critically. Such leaders
provide followers with challenging new ideas and encourage them to break away from
the old ways of thinking (Bass, 1985). As a result followers, under intellectually
stimulating leaders who are likely to alter their ways of thinking, are critical in their
problem solving and tend to have enhanced thought processes (Dubinsky et al., 1995).
Individualized consideration is concerned with developing followers by coaching and
mentoring (Bass, 1985; Bass and Avolio, 1990; Dubinsky et al., 1995). A leader
displaying individualized consideration pays special attention to each individuals
abilities, aspirations and needs to enhance followers condence in responding to
problems facing them and their organizations (Avolio, 1999). By providing mentoring
and one-to-one communication, such leaders are able to build a sense of determination
and self-condence in their followers (Bass, 1998; Dubinsky et al., 1995).
The theoretical model that guided this research is presented in Figure 1. Job
satisfaction, organizational commitment and perceptions of organizational with-
drawal behaviours (outcome variables) are hypothesized to be affected by
transformational leadership behaviour, with these relationships subject to the
moderating effect of collectivism. Job satisfaction is dened as a multi-dimensional
construct and includes satisfaction with co-workers, with supervisors and with work
in general. In terms of organizational commitment, we focused on affective
organizational commitment, which describes an individuals psychological attach-
ment to an organization through such feelings as loyalty, affection and belonging.
Perceptions of organizational withdrawal behaviours are dened as either job or
work withdrawal intentions.
Figure 1 Proposed general theoretical framework
1086 The International Journal of Human Resource Management
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Moderating effects of collectivism: work-related attitudes
Collectivistic culture refers to societies in which people from birth onwards are
integrated into strong, cohesive ingroups, which throughout their lifetime continue to
protect them in exchange for unquestioning loyalty (Hofstede, 1997: 51). Collectivistic
cultures emphasize the importance of the group or organization interests at the expense of
individual goals (Triandis, 1995). In collectivistic cultures, individuals transcend their
own self-interests and work towards group goals (Hofstede, 1980). Collectivists see the
self as totally part of the group and interdependent with other members of the group, who
are viewed as equal and the same (Singelis et al., 1995; Triandis, 1995). A central thesis
in Basss (1985) transformational leadership theory is that transformational leaders
inuence followers to transcend their own self-interests for the good of the group by
raising their awareness of the importance and value of group outcomes. Transformational
leaders transform the needs, values, preferences and aspirations of the followers from
self to collective interests, causing followers to become highly committed to the
leaders mission and to make personal sacrices in the interest of the group (Shamir et al.,
1993).
Although (but not always) collectivistic societies tend to be more hierarchical
(Hofstede, 1997), leaders operating under such systems are expected to help and care for
followers private lives. People who adhere to collectivistic principles remain
subordinate to their leaders for the sake of solidarity and harmony of the group. They
are expected to identify with the leaders goals and the shared vision of the organization
(Jung and Avolio, 1999). By denition, transformational leadership involves strong
personal identication with the follower (Bass, 1985). Such leaders create a shared vision
with the follower by articulating new opportunities, inspiring members and obtaining
their commitment to the leaders vision of the group and organization.
In collectivistic cultures, achievement motivation is socially oriented (Triandis,
1995). That is, it does not matter who chooses the task within the in-group; it is just as
satisfying and motivating as it is if any of them in the in-group chose the task. Such
cultures emphasize context and concern for the feelings of others in the group in their
communications (Kim et al., 1994). Previous research has shown that leaders who
show consideration for their followers cause their followers to become more attached
to the group (Korsgaard et al., 1995). Transformational leadership through indivi-
dual consideration pays special attention to each individuals abilities, aspirations and
needs to enhance followers condence in responding to problems facing them
and their organizations (Bass, 1985). Followers are treated individually in order to
raise their levels of maturity and to enhance effective ways of addressing their goals
and challenges.
The meaning of work is different in collectivistic cultures (Hulin and Triandis, 1981).
Collectivists emphasize co-operation, endurance, persistence and obedience (Hui and
Villareal, 1989). They tend to have long-term goal orientations (Hofstede, 1997) leading
to long-term commitment to the organization (Bass, 1998). Because, in collectivistic
cultures, organizational norms and values are strongly embraced and used as a
mechanism for social control, followers can more easily identify with the leader based on
a mutual belief in a common purpose. In addition, transformational leadership has been
conceptually linked to high determination and persistence (House and Podsakoff, 1996).
These authors suggest that the display of determination and persistence by a
transformational leader demonstrates courage and conviction in the vision and mission,
and thus inspires, empowers and motivates followers. Other studies also have shown that
transformational leaders through intellectual stimulation are likely to build cohesion
Walumbwa and Lawler: Building effective organizations 1087
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among team members (Bass, 1998). From this discussion, we proposed that collectivism
would be more easily inuenced by transformational leadership behaviour (Jung et al.,
1995). We tested the following hypotheses:
H1a: Transformational leadership behaviour and collectivism will interact such
that there will be a higher positive relationship between transformational
leadership behaviour and job satisfaction.
H1b: Transformational leadership behaviour and collectivism will interact such
that there will be a higher positive relationship between transformational
leadership behaviour and organizational commitment.
Moderating effects of collectivism: perceptions of withdrawal behaviours
Hanisch and Hulin (1990) empirically identied two types of organizational withdrawal
behaviours: job and work withdrawal. Job withdrawal refers to a set of behaviors that
dissatised individuals enact to avoid the work situations; they are behaviors designed
to allow avoidance of participation in dissatisfying work situation (Hulin, 1991: 476).
Variables such as desire to retire or resign, ease of quitting and turnover intentions
dene job withdrawal behaviours. Work withdrawal refers to behaviors dissatised
individuals use to avoid aspects of their specic work-role or minimizing the time spent
on their specic work tasks while maintaining their current organizational and work-
role memberships (Hanisch and Hulin, 1991: 111). Variables such as unfavourable
job behaviours, lateness and absenteeism dene work withdrawal behaviours. In the
present study, we focus on absenteeism and turnover intentions for two reasons.
Absenteeism and turnover have been subjects of much research in the organizational
sciences for many decades (Hulin, 1991; Martocchio and Harrison, 1993). The
constructs also are critical to an organization because the equivalent costs to the rm of
employees failing to come to work or quitting the organization and the subsequent
hiring of replacement employees are very important in terms of organizational
resources (Cascio, 1991).
Although there is a theoretical basis for expecting followers cultural orientation to
moderate the relationship between leadership style and work-related behaviours, such
as perceptions of job and work withdrawal behaviours, relatively little is known
regarding such processes. However, to the extent that transformational leadership
behaviour can interact positively with collectivism to motivate followers to increase
their satisfaction and organizational commitment, such interaction should also reduce
undesirable outcomes, such as turnover intentions and work withdrawal intentions. We
argue that, if transformational leadership interacts positively with collectivism in
predicting both satisfaction and organizational commitment, and if satisfaction and
commitment are both negatively related to withdrawal intentions, it follows deductively
that transformational leadership will be negatively related to perceptions of
organizational withdrawal intentions for collectivists. Consequently, we advanced the
following hypotheses:
H2a: Transformational leadership behaviour and collectivism will interact such that
there will be a higher negative relationship between transformational
leadership behaviour and job withdrawal behaviour.
H2b: Transformational leadership behaviour and collectivism will interact such
that there will be a higher negative relationship between transformational
leadership behaviour and work withdrawal behaviour.
1088 The International Journal of Human Resource Management
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Methods
Research methods
The empirical work in this study involved gathering information about employees by
conducting surveys in indigenous rms as well as foreign rms operating in China, India
and Kenya. The choice of these countries was driven both by the issues in the study and
by feasibility. For instance, it is desirable to have a range of levels of economic
development and growth represented in the study, as culture may be impacted upon by
economic change (Triandis, 1995). Thus, China is a country where the development
process has been under way for some time and the growth rate is high. India is a country
Table 1 Demographic characteristics of the three samples and overall sample
Variable China India Kenya Overall
Total respondents 213 206 158 577
Age (%)
2024 7.1 13.2 7.0 9.1
2529 27.3 27.3 32.3 28.5
3034 36.1 12.1 33.6 26.9
3539 16.5 14.1 13.3 14.7
4044 6.5 17.0 8.2 11.2
4549 4.7 10.2 5.6 6.8
50 and up 1.8 5.5 2.6
Education
a
Some high school 10 (4.9) 26 (16.5) 36 (6.2)
Some college or diploma 77 (36.2) 27 (13.1) 69 (43.7) 173 (30)
University degree 128 (60.1) 94 (45.6) 54 (34.2) 276 (47.8)
Post-graduate degree(s) 8 (3.8) 75 (36.4) 9 (5.7) 92 (15.9)
Gender
a
Female 117 (55) 52 (25.2) 52 (32.9) 221 (38.3)
Male 96 (45) 154 (74.8) 106 (67.1) 356 (61.7)
Marital status
a
Never married 39 (18.3) 68 (33) 63 (39.9) 170 (29.5)
Married or living together 170 (79.8) 131 (63.6) 89 (56.3) 390 (67.6)
Separated or divorced 4 (1.9) 3 (1.5) 5 (3.2) 12 (2.1)
Widowed 4 (1.9) 1 (.6) 5 (.9)
Position
a
Administrative 46 (21.6) 48 (23.3) 17 (10.8) 111 (19.2)
Clerical 22 (10.3) 31 (15) 79 (50) 132 (22.9)
Managerial 25 (11.7) 57 (27.7) 17 (10.8) 99 (17.2)
Professional 7 (3.3) 34 (16.5) 20 (12.7) 61 (10.6)
Technical 47 (22.1) 8 (3.9) 6 (3.8) 61 (10.6)
Other positions 66 (30.9) 28 (13.6) 21 (11) 113 (19.6)
Tenure (years)
b
Organization tenure 7.62 (4.96) 9.56 (8.44) 7.22 (6.66) 8.20 (6.89)
Current job tenure 4.85 (4.11) 5.99 (6.85) 5.58 (5.59) 5.46 (5.63)
Employment status
a
Full-time employee 210 (98.6) 201 (97.6) 156 (98.7) 567 (98.3)
Part-time employee 3 (1.4) 5 (2.4) 2 (1.3) 10 (1.7)
Notes
a
Percentages are in parenthesis.
b
Reported as mean with standard deviations are in parenthesis.
Walumbwa and Lawler: Building effective organizations 1089
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that is undergoing rapid growth, but where the process began fairly recently. Kenya is a
country where the potential exists for rapid growth, though that potential is not yet
realized. The emerging market areas in this study, then, will constitute a range of
economic and host-country characteristics.
Research design and data collection
Our sample consisted of employees in rms in the banking and nance sectors.
We selected these sectors because they have large numbers of employees with diverse
backgrounds at multiple levels in emerging economies. In addition, literacy rates are
generally much higher in these sectors than in the manufacturing sector, which facilitated
the use of questionnaires. While the choice of these two sectors controlled for industry
type, they also provided sufcient variation to test the hypotheses. We contacted human
resource managers and, in some cases, chief executive ofcers in each country to seek
their permission to use their employees in the present study. We assured employees that
all information would be kept condential and anonymous. The surveys, which included
all scales, were administered and collected by researchers in each country.
A total of 577 (China 213; India 206; Kenya 158) employees participated
in the present study. The mean age was 32.82 (China 32.22; India 34.34;
Kenya 31.65) and mean tenure was 8.20 years (China 7.62; India 9.56;
Kenya 7.22), with 39 per cent of the participants being women and 68 per cent
married or living together. More than 60 per cent of the participants performed
administrative, clerical, professional or technical duties and were well educated, with
more than 90 per cent having completed some college or university degree. Table 1
provides a summary of the demographic statistics for the three countries.
Measures
The survey utilized a variety of scales to measure major constructs that served as
dependent, independent and control variables. Of course, utilizing these scales in
countries where they have not previously been tested presented some potential problems.
To address these potential problems, we took several steps to ensure reliability and
validity (as discussed in procedure for data analyses) of the instruments utilized in the
present study.
The survey was developed in English and then translated into the appropriate language
for the employees receiving them, and back-translation was used to enhance the validity
of the translations (Brislin, 1980). For the non-English version, a bilingual speaker (of the
local language and English) performed the initial translations. After this, the
questionnaire was given to another bilingual translator, who then back-translated it
into English. English versions were used in Kenya and India, so it was necessary to
translate the questionnaire only for the Chinese sample.
Transformational leadership Transformational leadership was measured using twenty
items adapted from the Multifactor Leadership Questionnaire (MLQ) Form 5X-Short
(Bass and Avolio, 1995). Although questions have risen regarding the MLQ
dimensionality (e.g. Hinkin and Tracey, 1999; Yukl, 1999), recent evidence provided
by Avolio et al. (1999) supports the convergent and discriminant validity of the
instrument. We combined the four transformational leadership scales into one single
construct following recent theoretical developments on transformational leadership
theory (Bass, 1998). There were four scales measuring transformational leadership,
including charisma (idealized inuence), inspirational motivation, intellectual
1090 The International Journal of Human Resource Management
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stimulation and individualized consideration. Ratings were completed on a 1-to-5 scale,
with 1 representing Not at all and 5 representing Frequently, if not always. Sample
items included: Goes beyond self-interest for the good of the group and Articulates a
compelling vision of the future.
Collectivism We used eleven items adapted from Triandis and colleagues INDCOL
scale (e.g. Singelis et al., 1995; Triandis, 1995). Consistent with previous research (e.g.
Triandis and Gelfand, 1998), our initial analysis revealed that vertical and horizontal
collectivism scales are highly correlated. We thus combined these scales into one single
scale. All items were assessed on a 5-point scale, where 1 was Strongly disagree and
5 Strongly agree. The items address the extent to which respondents agree or disagree
that they exhibit vertical and horizontal collectivistic attributes. Sample items included:
I usually sacrice my self-interest for the benet of my group and My happiness
depends very much on the happiness of those around me.
Job satisfaction We used Smith et al. (1969) twenty-seven item Job Descriptive Index
(JDI) to measure the three facets of job satisfaction: satisfaction with co-workers, with
supervisors and with work in general. Respondents were asked to circle yes (2) if the
item described the people they work with, the supervisor or work in general; no (0) if
the item did not; and ? (1) if they could not decide. Example items included: People I
work with are intelligent and My supervisor praises good work.
Organizational commitment Organizational commitment was assessed using a ten-
item scale from Mowday et al. (1979). Sample items included: This organization has a
great deal of personal meaning for me and I would be very happy to spend the rest of
my career with this organization. Responses were made on a 5-point scale, with 1
representing Strongly disagree and 5 representing Strongly agree.
Perceptions of organizational withdrawal behaviours Perceptions of job and work
withdrawal were measured using scales adapted from Hanisch and Hulin (1990, 1991).
Six items addressed the extent to which respondents had thought of quitting. We reverse-
coded the responses to these items to measure the intentions to leave the organization.
Example item: How often do you think about quitting your job? Responses were made
on a 5-point scale (1 Never; 5 Constantly). Twelve items addressed perceptions of
work withdrawal behaviours. Respondents were asked to record the number of times
that they have done each behaviour in the past year. These behaviours were listed on an
8-point Likert-type scale rating ranging from Never (1) to More than once a week (8).
Example items included: How often do you think about being late for work and
Making excuses to go somewhere to get out of work.
Control variables Prior research has demonstrated the importance of controlling for the
effects of potentially confounding contextual and demographic factors in the assessment
of leadership processes and work-related attitudes (Berson et al., 2001; Pawar
and Eastman, 1997). For example, previous research has identied age, education,
gender, job level and tenure as predictors of commitment and satisfaction (Mathieu and
Zajac, 1990; Bedeian et al., 1992; Robie et al., 1998). Failure to address or control for
these variables may lead to specication errors in models used to predict leadership
processes. In the current study these variables were measured and used as control
variables.
Walumbwa and Lawler: Building effective organizations 1091
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Measurement equivalence
Little (1997) noted that one of the pressing issues in cross-cultural research is
establishing construct comparability in different samples. Therefore, we rst conducted
conrmatory factor analysis (CFA) to establish the validity and reliability of the scales
used in the study. We used a combination of mean and covariance structure (MACS:
Byrne, 2001; Little, 1997) and simultaneous factor analyses in several populations
(SIFASP: Sorbom, 1974) to test whether the same factor models hold for each of the
samples. We used AMOS maximum likelihood (Arbuckle and Wothke, 1999; Byrne,
2001) procedure because its estimators are asymptotically unbiased, consistent and
efcient (Bollen, 1989).
We formed three to four multi-item indicators for each of the constructs under
investigation to test the assumption that factor loadings are equivalent across the three
countries (Fitzgerald et al., 1997). This procedure was selected because it minimizes the
extent to which the indicators of each construct share variance (Robert et al., 2000). The
loading of the rst indicator was xed at 1.00 for identication purposes (see Byrne,
2001). In Model 1 (unrestricted), each indicator was allowed to load on only its factor,
but the factor loadings were allowed to vary across samples. In Model 2 (restricted factor
loading), factor loadings were restricted to be invariant across samples. In model 3,
additional restrictions of equal intercepts were added on the data. Acceptance of model 3
(fully restricted model) would imply that indicators provide approximately equivalent
measurement of the same constructs across the three countries (Little, 1997).
In assessing the model, we relied primarily on the change in the chi-square relative to
the change in degrees of freedom. Although the chi-square test is the standard statistic, it
is usually not recommended with large data sets because it is practically impossible to
fail to reject the null hypothesis (Little, 1997). Therefore, we also examined the overall
model t using a number of standard t indices, including the ratio of chi-square to
degrees of freedom (x
2
/df), goodness-of-t index (GFI), comparative t index (CFI) and
root mean square error of approximation (RMSEA).
The indices indicate a satisfactory t to the data for Model 1, the least restricted
model. The chi-square/degrees of freedom ratio was 1.52, the GFI was.88, the CFI
was .95 and the RMSEA was .03, indicating a very good t for a complex model.
Fit statistics were relatively unchanged for the more constrained Model 2: the chi-
square/degrees of freedom ratio was 1.54, the GFI was .88, the CFI was .95 and the
RMSEA was .03. Because Models 1 and 2 are nested, their differences in chi-square can
be compared to their differences in degrees of freedom; the ratio was 58.93/30 1.96.
These t statistics indicate that the factor loadings are approximately equal across the
three samples. Fit statistics for Model 3 also indicate a satisfactory t. The chi-
square/degrees of freedom ratio was 2.03, the CFI was .99 and the RMSEA was .04. The
difference in chi-square/differences in degrees of freedom ratio from Model 2 was
733.45/219 3.35, indicating a satisfactory t to the data under thorough constraints.
Given that Model 3 provided an adequate t to the data after we set very rigorous
constraints on the parameters across the three countries, we concluded that the
assumption of measurement equivalence was acceptable and used data as coming from
one single source in all later analyses.
Results
Table 2 displays means, standard deviations and correlations among all variables.
Transformational leadership was positive and signicantly correlated with collectivism
(r :20; p , .01), satisfaction with co-worker (r :31; p , .01), satisfaction with
Walumbwa and Lawler: Building effective organizations 1093
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Walumbwa and Lawler: Building effective organizations 1095
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supervisor (r :52; p , .01), satisfaction with work in general (r :44; p , .01) and
organizational commitment (r :41; p , .01). However, transformational leadership
was negative and signicantly correlated with job withdrawal (r 2:14; p , .01) and
work withdrawal (r 2:10; p , .05). It is also important to note that we performed
analyses to assess if any signicant differences occurred among rms in terms of
outcome measures, and none were found. Therefore, the variance that was found was
mainly due to the variance within the individuals.
Testing the proposed structural models
To test and interpret for the moderator effect of collectivism, we performed a sub-group
analysis. We split the sample into three roughly equal groups based on the collectivism.
We tted two different structural models to the data using the factor loadings obtained
from Model 3. In Model A, all paths were allowed to vary across samples, similar to the
way in which factor loadings were allowed to vary across the three countries in Model 1
in the measurement model, but this time across three different groups based on individual
scores on collectivism. In the second model, Model B, each of the paths was constrained
to be invariant across the three groups. The t statistics for Model A suggest a
satisfactory t of the model to the data. The chi-square/degrees of freedom ratio was
1.62, the CFI was .99 and the RMSEA was .03. When all the path coefcients were
constrained to be equivalent across the three groups (Model B), the t statistics
worsened, but only marginally. The chi-square/degrees of freedom ratio was 1.74, the
CFI was .99 and the RMSEA was .04 (Table 3).
The estimated structural paths of the invariant model are shown in Table 4. All the
paths were statistically signicant, except the path from transformational leadership to
perceptions of job and work withdrawal intentions under low collectivism.
Transformational leadership was positively related to all work-related attitudes.
As expected, transformational leadership was negatively related to perceptions of job
and work withdrawal under low, medium and high collectivism. Overall, results were in
the expected direction.
Post hoc moderator analysis
Our test of moderator effects was under the assumption that collectivism will inuence
the strength of the relationship between transformational leadership and outcome
variables. To further interpret whether collectivism moderated the strength of the
relationships, we performed Z-tests to assess if there were signicant differences
between the structural parameters of the low, medium and high collectivism. Results are
reported in Table 4. As can be seen in Table 4, our results suggest that collectivism
moderated the relationship between transformational leadership and organizational
commitment and satisfaction with co-worker. We did not nd signicant differences with
other outcome variables.
Discussion
The primary focus of this study has been to examine the moderating effect of
collectivism on the relationships between transformational leadership and work-related
outcomes. Overall, the results of the study provide support for the moderating
hypothesis. We found evidence to support our hypothesis that collectivism moderates the
strength of transformational leadership and work-related outcomes. Specically,
transformational leadership explained a signicantly greater proportion of variance in
1096 The International Journal of Human Resource Management
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work-related attitudes, especially organizational commitment and satisfaction with
co-worker compared to perceptions of withdrawal behaviours. These results may be
explained by the idea that transformational leaders emphasis on collective achievement
and goals are consistent with collectivism (Jung et al., 1995). For example,
transformational leaders through intellectual stimulation cause followers to become
attached to their organizations and encourage them to transcend their self-interests and
work towards group goals leading to long-term commitment (Bass, 1998).
Contrary to our expectation, transformational leadership explained a greater
proportion of variance in all outcome measures under low, medium and high
collectivism. This pattern of inuence would be consistent with the idea that
transformational leaders pay special attention to each individuals abilities, aspirations
and needs to enhance their condence in responding to challenges facing them and their
organization. Thus, because transformational leaders work towards developing
followers personal interests in line with collective interests, it was not surprising that
transformational leadership resonated more positively with all levels of collectivism.
Consistent with expectation, we found that transformational leadership and
collectivism interacted such that there was a signicantly negative relationship between
transformational leadership and perceptions of withdrawal behaviours. These results may
be partially explained by transformational leaders strong personal identication with
followers (Bass, 1985), resulting in reduced withdrawal behaviours. By articulating a
realistic vision of the future that can be shared, a transformational leader arouses
followers needs and values, directs their attention towards desired outcomes and away
from undesired or unnecessary aspects of behaviours (Yammarino and Bass, 1990). As a
consequence, followers of a transformational leader are likely to identify and become
willing to engage in self-sacricial behaviour in the interest of the group and the
organization (Bass, 1985; Shamir et al., 1993).
Overall, the results suggest that transformational leadership has positive impact on
the outcome variables. Thus, the current study extends existing knowledge by testing the
moderating role of cultural orientation in transformational leadership processes. The
study shows that transformational leadership is effective in a unique way. This is
explained by the fact that transformational leadership impacted positively on low,
medium and high collectivism.
Theoretical and practical implications for future research
While our initial test of the moderator hypothesis, using the three different groups,
provided support for the moderating hypothesis, our post hoc analyses using Z-tests to
assess the differences in the groups did not yield consistent support for the moderating
effect. However, our results, consistent with previous research (e.g. House et al., 1997),
still suggest that cultural forces might play an important role in moderating the impact of
leadership on outcomes. Therefore, organizations would benet greatly by leadership
development programmes that take into account cultural orientation consideration
(Jung and Avolio, 1999).
Another interesting result of the current study was the positive impact transformational
leadership had on low, medium and high collectivists satisfaction, commitment and
perceptions of withdrawal behaviours. This has practical implications for training. It may
suggest that organizations can benet greatly by providing transformational leadership
training programmes for their managers and supervisors (Avolio, 1999; Jung and Avolio,
1999). We are of the opinion that managers and supervisors equipped with
transformational leadership techniques are likely to engage employees by identifying
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their strengths, setting accurate and reasonable expectations for them, developing them
and motivating them to perform beyond their expectations (Bass, 1985). On the
other hand, it explains to some extent research ndings that suggest transformational
leadership can be effective across cultures (e.g. House et al., 1999).
Although signicant results were obtained between transformational leadership and
perceptions of withdrawal behaviours, this area of research still merits empirical
investigation. Further, our study tested only a moderated model of the impact of
collectivism. It is important that future studies attempt to include, where possible, the
moderating impact of individualism as well as other aspects of transformational
leadership theory. For instance, Jung and Avolio (1999), using Asian (collectivistic) and
Caucasian (individualistic) students reported that individualists generated more ideas
with a transactional leader.
Limitation
Despite the potential important implications of this research, two aspects of our study are
worth noting. In the current study, we measured perceptions of individuals as surrogates
for actual behaviours. Although past studies (e.g. Hanisch and Hulin, 1990, 1991) have
found behavioural intentions signicantly related to actual behaviours and were an ideal
substitute for actual behaviours, especially when constraints do not allow the actual
behaviours to be measured, future studies should consider measuring actual behaviour.
One reason that we did not show a strong moderating effect by culture might be that
the range of cultural values could have been restricted since our sample was drawn from
inherently collectivistic cultures. By expanding the analysis to include individualistic
cultures, future studies might sample a wider range of cultural values and thus reveal
stronger interaction effects. Of course, individualistic countries generally have much
higher levels of economic development than the countries studied here, so that approach
would confound efforts to assess the impact of development per se on the processes
studied here.
Summary
Among the strengths of the current study is the fact that data were collected in more
culturally and occupationally diverse groups. In addition, because this study was
conducted in a eld setting, the results of the current study represent true or natural
behaviour, and hence are more generalizable (Wofford, 1999). The results of the current
study point to the importance of examining the potential moderating effects of cultural
orientation in transformational leadership processes. It is our expectation that the results
of the current study will hold when applied to other countries. Finally, we hope this
research has added knowledge to the existing body of literature in cross-cultural
leadership studies and that it will motivate further research into other cultural and
leadership aspects that might enhance effective leadership processes.
Acknowledgements
This study was partially supported by the Center for International Business Education at
the University of Illinois at Urbana-Champaign. An earlier version of this article was
presented in August 2002 at the annual Academy of Management Meetings in Denver,
Colorado, USA.
We offer our sincere appreciation to the anonymous reviewers for their constructive
comments and critique, which were extremely helpful in honing our ideas.
1098 The International Journal of Human Resource Management
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