Academic journal article Journal of Business Strategies

Moderating Effect of Hofstede's Cultural Values on the Locus of Control/job Performance Relationship of Managers in USA, Mexico, South Korea and Hong Kong

Academic journal article Journal of Business Strategies

Moderating Effect of Hofstede's Cultural Values on the Locus of Control/job Performance Relationship of Managers in USA, Mexico, South Korea and Hong Kong

Article excerpt

Abstract

This study evaluates relationships between job performance, locus of control, and cultural values. Survey data was collected from 265 managers working for US controlled firms located in the US, Hong Kong, South Korea and Mexico. Findings indicate that there is a stronger relationship between reported job performance and a manager's personality versus the manager's culture. These results should help multinational firms better understand a significant influence on the job performance of mid-level managers working in different countries. US controlled, manufacturing multinational firms can feel confident when designing management control systems at the individual level regardless of the country in which they operate.

Introduction

Today's global economy poses many challenges for multinational corporations (MNCs). Cross-national human resource management is one of many logistic challenges that MNCs must address. Human resource management requires a significant investment in time and money and it is important for international companies to identify and attract high performance managers. Another challenge for MNCs is whether to design management control systems for each country in which they operate at a macro level for the whole company (where a Human Resource Management policy is developed for the whole organization and is directed from headquarters) or at a micro level for individual employees in the company within a specific country (where each subsidiary and plant would develop its own HRM policy without a centralized model). In other words, should the management control systems be directed from the multinational's headquarters, or should management control systems be designed for each country considering that country's culture? It is useful to know what is more significant when attempting to maximize job performance: a manager's personality or a manager's culture. Barrick and Mount (2005) concluded that personality is an effective predictor of job performance and emphasized that managers should care about the personality of employees. But MNCs have employees located in various and diverse cultures. Competitive success in a global environment requires an awareness of how personality and culture may affect employees' job performance. There are practical implications to finding whether MNCs must consider the personality or the cultural values of the manager when job performance is to be maximized.

In a meta-analysis study, Ng, Sorensen and Eby (2006) examined the relationship of the personality variable locus of control (LOC) and various work outcomes and found that internal locus of control was positively associated with favorable work outcomes. Spector (1982) found that internals have higher job performance than do externals. The role of personality at work has received increased attention (Barrick & Mount, 2005) because all managers have a personality and personality helps predict and explain behavior at work (Goldberg, 1993).

In addition to managers' personalities, MNCs must remember that national culture must be considered when managerial practices are implemented. There are various management control systems (MCSs). A universally used MCS is Budgeting. According to Leach-Lopez et al. (2007) the managerial practice of budget participation works to help job performance of managers in various countries. But is job performance affected by the personality or by the culture of the manager'? Should a different MCS be designed for each country? National culture is an important field of study in various business disciplines: Leach-Lopez, Stammerjohan, and McNair (2007) and Lagrosen (2002), among many others, found that culture matters.

Flynn and Saladin (2006) believe that the role of national culture has not been systematically investigated in an organizational context. Kirkman, Lowe and Gibson (2006) also believe that there are still many gaps in cultural studies and suggest various research ideas that still need to be explored. …

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