Marketing Homework1

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European Journal of Marketing Vol. 37 No. 1/2, 2003 pp. 50-85 # MCB UP Limited 0309-0566 DOI 10.1108/03090560310453939

Received October 1999 Revised September 2000 Revised February 2001

Leadership style, motivation and performance in

international marketing channels

An empirical investigation of the USA, Finland and Poland

Rajiv Mehta School of Management, New Jersey Institute of Technology, Newark,

New Jersey, USA

Alan J. Dubinsky Purdue University, West Lafayette, Indiana, USA, and

Rolph E. Anderson College of Business and Administration, Drexel University, Philadelphia,

Pennsylvania, USA

Keywords Leadership, Motivation, Performance, International marketing

Abstract As firms seek to prosper in a fiercely competitive global economy, cooperative inter- firm alliances among members of the value chain are increasingly being forged. In the area of marketing channels, strategic alliances among international channel partners have become the norm as well. Thus, identification of inter-firm influence strategies – such as different leadership styles – used by the channel captain to motivate international channel partners becomes increasingly important. More specifically, in administering a firm’s marketing channels, participative, supportive, and directive leadership styles may be effective in eliciting channel partners to exert higher levels of motivation, which, in turn, may be associated with higher levels of performance. The linkages among leadership styles, motivation, and performance are empirically examined on data drawn from a sample of automobile distributors in the USA, Finland, and Poland. International channel management implications are discussed, limitations of the study are identified, and directions for future research are suggested.

Interorganizational marketing channels exist in a very competitive environment. Due in large part to the globalization of trade, competition among businesses has intensified, contributing to the heightened importance of distribution in a firm’s overall marketing strategy. While high quality products, effective promotions, and competitive pricing have become ubiquitous, firms are increasingly turning to distribution as a key strategy of marketing differentiation (Rosenbloom, 1999). Thus, delivering the product to

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The authors gratefully acknowledge the reviewers for their valuable comments. They also extend their gratitude to Pia Polsa and Jolanta Mazur for assistance in data collection. This work is supported, in part, by New Jersey Institute of Technology, University Heights, Newark, NJ 07102, under Grant No. 4-21840.

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the final customer faster and more efficiently than competition becomes a critical success factor.

In the current global competitive climate, the motivation of international channel partners to achieve individual and collective goals is becoming increasingly important. More specifically, motivation aimed at enhancing performance of all channel partners becomes crucial to the effectiveness of interfirm alliances. This situation places a premium on the channel captain’s employing appropriate leadership styles that motivate international channel partners to perform distribution tasks and marketing functions more efficiently and effectively than their competitors. There is, however, a paucity of literature on international channel partner motivation. Because of this situation, the present study investigates whether: different leadership styles can be used as channel strategies to enhance channel partner motivation; the leadership style/ motivation nexus varies across countries; and channel members’ motivation is associated with their performance.

Examining the influence of leadership style on channel partner motivation in an international context is important in order to discern whether the impact of leadership approaches is different across nations. Admittedly, some scholars assert that cultures are converging and, thus, the transferability of management theories via standardized management practices across national markets is appropriate (Harpaz, 1990; Misawa, 1987; Ralston et al., 1992). They argue that globalization and change in technology lead to standardization, increasingly similar cultures, and universal management practices. If globalization is `̀ shrinking the world’’, as Levitt (1983) contends, then using uniform managerial practices – such as leadership styles – on an international basis may be viable.

Alternatively, though, strategies for effective channel management in different countries may well require the use of contrasting leadership styles. Indeed, several studies have found that the cultural environment can significantly affect marketing channel structure and strategy and the relationships among international channel partners. For instance, in an investigation of consumer goods channels in Egypt, India, Japan, Tropical Africa, Turkey, and Venezuela, Wadinambiaratchi (1965) found variations in channel structures and processes; he attributed these to the countries’ different `̀ social, psychological, cultural and anthropological climates’’. Other studies of marketing channels in Great Britain and North America (Hall et al., 1972), Western Europe (Guirdham, 1972), Puerto Rico (Galbraith and Holton, 1955), and tropical Africa (Baker, 1965) ascertained that marketing channel practices in different countries are significantly divergent and highly shaped by culture. In addition, Shimaguchi and Rosenberg (1979) and Kaikati (1993) state that the distribution practices even in the highly industrialized nation of Japan are seemingly primitive. More specifically, the complex and inefficient channel structure with layers on layers of middlemen, as well as the keiretsu-based distribution system, might well be the result of socio-cultural factors. Furthermore, research on international joint ventures has revealed that cultural

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differences may create ambiguities that hinder cooperation and lead to conflict or failure of the venture (Barkema et al., 1996; Barkema and Vermeulen, 1997). Seemingly, then, in order for international channel strategies to be successful, channel leaders should take into consideration the cultural context in which they operate. That is, if cultural differences have an impact, then management practices – including the use of alternative leadership approaches – may not be universally applicable. Thus, this study will seek to identify which leadership styles may be appropriate to employ in different national settings.

In the course of serving global markets, firms have become increasingly reliant on international channel partners for the efficient and effective performance of marketing functions (Kumar et al., 1992; Lambert and Cook, 1979; Rosenbloom, 1979, 1999). Because international channel partners can significantly influence a firm’s success or failure in the long run, manufacturers are becoming increasingly concerned about the performance of the institutions that constitute their marketing channels. Moreover, the level of performance attained by their channel partners is pivotal if a firm is to achieve a competitive advantage (Porter, 1980, 1985; Rosenbloom, 1999). Therefore, because channel leaders are concerned with improving performance in the marketing channel, the relationship between motivation and channel partner performance is also investigated.

This manuscript first reviews the germane literature on leadership, motivation, and national culture, the focal constructs of this study. Second, research hypotheses are developed. Next, the research methodology is described, followed by the findings of the study. Finally, managerial implications are discussed, limitations of the study are identified, and directions for future research are proffered.

Leadership in marketing channels In extending the seminal work of Macneil (1980), many channel researchers suggest that behavior in marketing channels can be characterized by relational exchanges, wherein a stream of multiple transactions are anticipated over an extended period of time, with a focus on long-term payoffs (Anderson and Narus, 1991; Dwyer et al., 1987; Fontenot and Wilson, 1997; Heide and John, 1988; Kaufmann and Stern, 1988; Lusch and Brown, 1996; Paswan et al., 1998). Over the past two decades, firms have increasingly resorted to relational exchanges as a means of attaining competitive advantage (Webster, 1992). Adoption of this new philosophy has led to the development of long-term buyer-seller relationships and the forging of strategic alliances and partnerships between channel participants (Fontenot and Wilson, 1997). Nonetheless, even within these arrangements, partner asymmetries (Harrigan, 1988) may exist that can create an unequal balance of power. Thus, a dominant partner may emerge as the de facto leader even in highly ordered, relational exchange social systems such as marketing channels. Consequently, the need for leadership in marketing channels continues to be important despite the move from discrete to relational exchanges. Therefore, the channel captain’s leadership can have a substantial influence on the distribution channel’s

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effectiveness and long-run survival (Bucklin, 1973; Etgar, 1977; Little, 1970; Mallen, 1964; Robicheaux and El-Ansary, 1976).

Channel leadership can be defined as the activities undertaken by the channel leader to influence the marketing policies and strategies of channel partners (El-Ansary and Robicheaux, 1974; Price, 1991a, b; Schul et al., 1983). Research reveals that largely through boundary personnel (i.e. channel partners) does the channel leader exercise a leadership role (Anderson and Chambers, 1985; Anderson and Narus, 1984; Frazier, 1983; Frazier and Summers, 1984; LaFleur et al., 1989; Schul et al., 1983). Using this line of reasoning, Barnett and Arnold (1989) and Stern et al. (1996) note that if marketing channels are indeed superorganizations, a channel leader is requisite to coordinate channel activities.

Lucas and Gresham (1985) and Schul et al. (1983) aver that our knowledge of the impact of channel leadership behaviors should be advanced by extending and integrating related leadership theories from the organizational sciences to a marketing channels context. As such, leadership styles have been conceptually and empirically linked to such channel-related phenomena as manifest conflict, compliance, cooperation, channel efficiency and effectiveness, role stress, satisfaction, and motivation (Barnett and Arnold, 1989; English and Arnold, 1987; Schul, 1987; Schul et al., 1983; Price, 1991a, b). No empirical studies, however, have examined the use of leadership styles for motivating a firm’s channel partners in a cross-cultural context.

Channel leadership styles Leadership style concerns how a channel leader secures the compliance of channel partners (English and Arnold, 1987). Barnett and Arnold (1989) indicate that while the channel leader can employ a large number of leadership styles, participative, supportive, and directive leadership styles are especially germane for interorganizational management of marketing channels.

Participative leadership style. A participative leadership style is one in which subalterns are able to influence decisions about their work situation to a large degree (Teas, 1982). This type of leadership style is analogous to participative management in which subordinates share a significant degree of decision- making power with their superiors (House and Mitchell, 1974; Robbins, 1996). In a channel context, a participative leader consults with channel partners, solicits their suggestions, and considers these suggestions in making decisions on the development of channel-wide policies and procedures (Schul, 1987; Schul et al., 1985, 1983).

Supportive leadership style. A supportive leadership style is one in which the leader creates a facilitative task environment of psychological support, mutual trust and respect, helpfulness, and friendliness (Daft, 1988; Gibson et al., 1988). A channel leader displaying supportive leadership considers other channel partners’ needs, displays concern for other channel partners’ well-being, creates a pleasant atmosphere for interaction, accentuates other channel

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accomplishments, looks out for their welfare, attempts to establish mutual interest, and builds a team climate (Schul, 1987; Schul et al., 1985, 1983).

Directive leadership style. A directive leadership style is one in which the leader provides specific direction to subordinate work activity by organizing and defining the task environment, assigning the necessary functions to be performed, specifying rules, regulations, and procedures to be followed in accomplishing tasks, clarifying expectations, scheduling work to be done, establishing communication networks, and evaluating work group performance (Gibson et al., 1988; House and Dessler, 1974; House and Mitchell, 1974). In a marketing channel setting, these activities entail the channel leader planning, organizing, coordinating, and maintaining overall control of channel operations. A directive leader consistently communicates to channel partners channel-wide objectives, policies, rules and regulations, and operating procedures to be followed in the performance of distribution tasks and marketing functions (Dwyer and Oh, 1987; John, 1984; Schul et al., 1985, 1983).

Overview of leadership styles Each of the three foregoing leadership approaches refers to the extent of activity channel leaders can exhibit in managing marketing channel activities with their channel partners. Consequently, a channel leader using a particular leadership style (e.g. participative) will manifest a certain degree of that style. Moreover, a channel leader may exhibit varying degrees of participative, supportive and directive leadership styles concurrently or have a greater propensity for using one style over the other two. Admittedly, then, the preceding discussion suggests that participative, supportive, and directive leadership styles are conceptually distinct, independent constructs; because they can be displayed contemporaneously, though, they might be empirically linked as well.

Motivation in marketing channels According to Rosenbloom (1999), the channel leader needs to take administrative actions to secure the cooperation of international channel partners. At this intersection, channel partner motivation plays a fundamental and strategic role in maintaining an effective strategic alliance. Channel partner motivation refers to the effort a channel participant expends on activities associated with his or her channel role (Price, 1991a). Consequently, motivation is conceptualized in the present work as the level or amount of effort a channel partner is willing to exert on distribution tasks and activities associated with the channel role. To be compatible with prior research on channel partner motivation (LaFleur et al., 1989), the expectancy theory of motivation was employed in this study as the appropriate framework with which to examine channel partner motivation.

Expectancy theory espouses that individuals contemplate the consequences of personal actions in choosing different alternatives to satisfy their needs (Campbell et al., 1978; Mitchell, 1974; Vroom, 1964). In a marketing channel

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context, expectancy theory implies that the tendency for a channel partner to act in a certain way depends on:

the degree of expectation that a certain action will be followed by a given outcome; and

the attractiveness of that outcome to the channel participant.

The theory includes the relationships among three variables:

(1) Expectancy (effort-performance linkage) refers to the perceived probability by the channel partner that exerting a given level of effort will lead to higher performance.

(2) Instrumentality (performance-reward linkage) is the channel partner’s estimate of the probability that achieving a certain level of improved performance will lead to the attainment of certain outcomes (rewards). The reward may be internal, granted by the channel partner (i.e. a sense of accomplishment), or external, granted by the organization or some other `̀ outsider’’.

(3) Valence (the attractiveness of rewards) refers to the desirability of a potential outcome or reward that the channel partner may receive from improved performance. Symbolically, the motivation of a channel partner is a function of the probability of an expectancy estimate multiplied by the probability of the instrumentality estimate multiplied by the valence for the reward:

Motivation ˆ Xm

iˆ1 Ei £

Xn

jˆ1 Ij £ Vjk

Á !" # …1†

where:

Ei ˆ probability of an expectancy; Ij ˆ probability of an instrumentality;

Vjk ˆ valence or desirability for the reward or outcome.

LaFleur et al. (1989) developed a conceptual model for channel management using expectancy theory. Their model is intuitively appealing because the relationship between channel partners can be characterized as an on-going dyadic process. Consequently, the motivation strategies employed by a channel leader influence a channel partner’s level of motivation, which, in turn, affects the leader’s choice of motivation strategy in the future. Because many channel intermediaries are independent, leaders must employ motivation strategies to influence channel partner sentiments and behaviors, thus assisting in achievement of channel system goals and objectives.

Channel strategies for motivating channel partners can be categorized as economic and behavioral. Common channel strategies for motivating channel

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partners include paying higher slotting allowances, offering higher trade discounts, providing strong advertising and promotional support, training channel partners’ salespeople, as well as giving superior logistical support (Rosenbloom, 1978, 1999). Use of leadership styles as an alternate channel strategy that may enhance channel partner motivation is explored. Cross- cultural management literature, however, indicates that the use of leadership styles may be contingent on the cultural context (Frazier et al., 1989; Francesco and Gold, 1998; Hofstede and Bond, 1988; Johnson et al., 1993, 1996; Kreitner, 1995; Rodrigues, 1990). Therefore, we now examine the notion of national culture.

National culture Culture has been defined by Ferraro (1990, p. 18) as `̀ everything that people have, think, and do as members of their society’’ and by Hofstede (1991) as `̀ the software of the mind’’. The cultural environment is of paramount concern in international marketing because, as Cateora and Graham (1999) state, culture shapes the values, assumptions, and behavior of individuals and organizations in society. For instance, in some cultures intense, even direct, competition is encouraged, while in other cultures consensus building is advocated. In some cultures decision-making has traditionally been centralized, yet in others it is decentralized. Thus, Earley (1994) and Newman and Nollen (1996) aver that because culture determines values, management practices need to be consistent with these values; otherwise, organizational performance is likely to be reduced. In short, management strategies and tactics may need to be adapted to be compatible with a given culture.

The preceding dialectic suggests that the use of leadership styles in managing a firm’s international marketing channels may be affected by culture, as channel partners from different countries may not respond the same way to a particular leadership style. That is, a leadership style that is effective in one culture may be ineffective in another culture. Therefore, channel leaders should base their choice of leadership style on the cultural conditioning of their channel partners. Hence, channel leaders need to have sufficient knowledge of the given culture that they are servicing.

Researchers have developed various cultural frameworks (see, for instance, Hall, 1976; Hofstede, 1980, 1984a, b, 1991; Trompenaars and Hampden-Turner, 1998). For example, using an anthropological approach, Hall (1976) dichotomized cultures into low context and high context. In low context cultures most of the meaning of a communication is embedded in explicit verbal expressions, whereas in high context cultures the meaning of a communication depends very heavily on the context or non-verbal aspects of communication. When a person from a high context culture interacts with a person from a low context culture, misunderstandings, frustrations, and conflicts may arise that hinder business interactions.

Trompenaars and Hampden-Turner’s (1998) 7D-Model of culture is based on results from 50,000 managers in multinational corporations from over 100

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countries. In their paradigm, individuals differ in the specific solutions they choose to problems vis-aÁ -vis the seven fundamental dimensions. While this approach is rich and similar in some respects to Hofstede’s framework, Trompenaars and Hampden-Turner did not publish the raw indices of their cultural dimensions, thus not affording opportunity to compare their indices with subsequent empirical research.

Hofstede, who has conducted extensive cultural research, conceptualized one of the most popular theories of culture – as evidenced by 1,036 citations from Culture’s Consequences (Hofstede, 1984a) reported in the Social Science Citation Index between 1980-1993 (Sondergaard, 1994) and over 61 replications of his work. Because his theory has been replicated and validated by numerous researchers and his published indices are available, Hofstede’s framework is utilized in this research to develop a series of hypotheses relating leadership style to channel partner motivation.

Hofstede’s national culture typology Hofstede initially identified four underlying cultural dimensions:

(1) individualism versus collectivism;

(2) strong versus weak uncertainty avoidance;

(3) large versus small power distance; and

(4) masculinity versus femininity[1].

These are now briefly described (per the work of Hofstede, 1980). Individualism versus collectivism. Members of individualist societies are

especially concerned about their self-interests and expect people to take care of themselves and their immediate families. Identity resides within the individual rather than in the groups or organizations to which a person belongs. Also, there is greater emphasis on individual achievement. As a result, people strive to achieve an active role where their contributions will be noted and valued. Members, however, expect rules for behavior and rewards for achievement to be clearly stated so that they can map their road to individual advancement.

Members of collectivist societies promote group interests and think about and have concern for society at large. Additionally, they expect groups to which they belong to look after them. Belief is placed on group decisions, and private life is not separate from the group to which a person is associated. Moreover, individual opinions are predetermined, and complete loyalty must be shown to the group or organization (Hofstede, 1980). Interdependence among group members is necessary to ensure the success of the whole.

Strong versus weak uncertainty avoidance. Societies evincing strong uncertainty avoidance feel more threatened by uncertain or ambiguous situations and, therefore, tend to have formal rules and be intolerant of unusual behavior or ideas. Members exhibit a strong need for consensus, are affected by higher anxiety and stress, and are concerned about security. In weak uncertainty avoidance cultures, rules are considered more as a matter of

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convenience than immutable law and are relatively easily altered. This kind of society accepts dissent and risk-taking. Members feel more comfortable suggesting alternative methods, which may or may not be ultimately implemented. In addition, a comfortable, friendly environment tends to be valued over a rigid climate.

Large versus small power distance. Power distance describes the degree to which a society accepts that power is distributed unequally among its members. In large power distance countries, subordinate dependence is expected and paternalism is common. Members accept that a level of inequality exists, and everyone has a set place within that order. Other members are considered threats to one’s power and are rarely trusted. In small power distance societies, more participation in decision-making from subordinates is encouraged. Members are considered interdependent, and inequality is minimized. Latent harmony exists among those in and out of power, and there is a greater sense of trust in others.

Masculinity versus femininity. Members of masculine societies place increased emphasis on materialism and acquisition of wealth and decreased emphasis on quality of life. Males are expected to dominate society, and sex roles are clearly defined and differentiated. Job performance is of paramount importance, and members live in order to work. In feminine societies, though, there is greater emphasis on solidarity and concern for others. Furthermore, sex roles are more flexible, interdependence is the norm, and people work in order to live.

Research hypotheses Shown in Figure 1 is the proposed conceptual model that is to be tested. The hypothesized direction of the relationships among the constructs is indicated next to each of the paths. The model indicates that the linkages among participative, supportive, and directive leadership styles, and channel partner motivation are positive but moderated by national culture. Moreover, it suggests that motivation is a determinant of channel partner performance. The basic components of the model and the putative relationships among the constructs were derived from the discussion of the focal constructs offered in the foregoing sections, as well as a synthesis of past theoretical and empirical research. The hypotheses underlying this conceptual model are discussed subsequently.

As mentioned earlier, some studies on marketing channel relationships have found that differences exist in channel member behaviors in divergent cultural contexts; therefore, response elicited from channel partners may depend to a large extent on cultural context (Frazier et al., 1989; Johnson et al., 1993, 1996). This tends to lend support for the notion that culture needs to be taken into consideration when channel member behaviors and sentiments are being investigated in multiple nations. More specifically, channel leaders need to match leadership styles with a particular culture and know the relative effectiveness of the various leadership styles for stimulating channel partner motivation under various cultural conditions.

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Leadership style and channel partner motivation Participative leadership. A participative leadership style can have an auspicious affect on channel members’ expectancies, instrumentalities, and valences. This occurs through eliciting members’ ideas and opinions and encouraging participation in channel operations and decision-making. Allowing channel partners to participate actively in decision-making is likely to increase their knowledge of what is expected of them in terms of their performance and what rewards and support might be attained from exerting extra effort. It also provides channel partners a clearer understanding of the ways to receive various rewards and for identifying the rewards they value most. Further, by allowing channel partners to provide input into problem solving, they may be more motivated to resolve problems affecting the channel. A participative leadership style, which is a key management practice in strategic alliances and relational exchange arrangements, should be associated with higher levels of motivation because of channel partners’ beliefs that a high level of effort will lead to desirable outcomes.

Involvement in decision-making also increases the perception of control a channel partner has in performing distribution tasks. Bucklin (1973) indicates that when a channel leader does not allow other channel partners to have input into marketing programs, the ability of channel partners to adjust to the individual needs of their customers is impaired. Hence, a participative channel environment that encourages channel partners to influence decisions that affect their status in the channel may produce a highly motivated channel system (Schul et al., 1985). Although the relationship between participative leadership style and motivation has not been investigated in a channels setting, various related studies in organizational behavior and sales management have found that allowing subordinates to participate in decision-making leads to increased

Figure 1. A conceptual model of

leadership styles, channel partner

movtivation, and performance: the role of

national culture

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motivation (e.g. Kohli, 1985; Mitchell, 1973; Teas, 1981, 1982; Tyagi, 1982, 1985).

Supportive leadership. A supportive leadership style can be motivational to the extent that it causes the initiation, intensity, and persistence of work related behaviors in subordinates. Thus, a supportive channel leader is perceived as displaying feelings of trust, encouraging the development of close, mutually satisfying relationships, and creating a favorable atmosphere for interaction. Further, he or she not only recognizes, but also is responsive to channel partners’ needs by offering support (thus enhancing their expectancy, instrumentality, and valence estimates). This is likely to result in an increase in the level of effort channel partners exert on various distribution tasks associated with the products or services of the channel leader. Although the relationship between these variables has not been investigated in a channels setting, empirical evidence in the organizational sciences and sales management suggests that supportive leadership behavior is associated with higher levels of motivation (Evans, 1974; House and Dessler, 1974; Teas, 1981, 1982; Tyagi, 1982, 1985).

Directive leadership. A directive leadership style can be an effective means to plan, organize, coordinate, and maintain control over the work-related activities of subordinates. Established through formalization, the institutionalization of explicit rules and operating procedures to govern channel activities is a method channel leaders can use to structure the performance of distribution tasks (Dwyer and Oh, 1987; John, 1984). When channel partners engage in ambiguous or unstructured tasks, they might feel that by following explicitly stated guidelines of the channel leader – who usually has more expertise and knowledge about products – they may be more successful in attaining overall performance objectives. That is, by adhering to codified rules and regulations, channel partners should have adequate knowledge regarding what they are to do and how to perform these distribution tasks. To the extent that the rewards are consistent with their needs and expectations, channel partners should exert a higher level of effort. Findings reported in the social sciences (e.g. James et al., 1977), organizational sciences (Evans, 1970, 1974), and sales management (Teas, 1981, 1982; Tyagi, 1982, 1985) indicate that directive leadership behavior has a positive impact on subordinate expectancies, instrumentalities, and valences.

Leadership style and channel partner motivation: the moderating role of national culture Leadership styles have obtained currency in the literature on cross-cultural management. As noted earlier, literature in organizational sciences, sales management, and industrial psychology acknowledges that leadership is a determinant of motivation. Hofstede (1980), however, promulgates that the relationship between leadership and motivation may be influenced by the cultural milieu. Subsequent work in that area also suggests that the use of alternate leadership styles is contingent upon a given cultural setting (Francesco and Gold, 1998; Hofstede and Bond, 1988; Kreitner, 1995; Rodrigues,

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1990). Based on the foregoing dialectic, then, the relationship between leadership styles and channel partner motivation may well be moderated by national culture. Therefore, this moderating effect is tested using a sample of channel members from the USA, Finland and Poland (postliminary justification for utilizing this sample will be provided). Use of national culture scores – predicated on the work of Hofstede (1984b), Hessels (1996), and Kasper et al. (1999) – will be employed to assist in deriving the hypotheses that follow. (Scores can range between 0 and 100 on each of the four dimensions of culture.) The hypotheses proffered are predicated on the idea that the nature of the relationship between leadership style and motivation is invariant across cultures, but the degree of the relationship varies.

USA. Examination of the national culture scores, as shown in Table I, reveals that the USA is an extremely individualistic and relatively masculine- oriented society. These two orientations imply that individuals in the USA tend to have a focus on their self-interest, expect to take care of themselves, strive to achieve an active role where their individual contributions will be noted and lauded, and possess an increased interest in acquisition of wealth. They expect, however, rules for behavior and rewards for achievement to be clearly identified in advance so that they can chart their path to individual advancement. A directive leadership style, because of its attention to specified directions, guidelines, procedures, should have an especially propitious impact on motivation when the foregoing conditions are manifested in a society. Therefore, channel leaders who evince a directive leadership style by establishing rules and regulations, developing operational procedures to be followed in the performance of distribution tasks, and identifying what rewards will be received if performance expectations are met should have a decidedly salubrious impact on channel member motivation.

Moreover, the USA’s scores on power distance and uncertainty avoidance are relatively low. As such, people are considered equal and consensus building is favored; additionally, they have at least a modicum of tolerance for ambiguous situations. Therefore, channel leaders building a friendly task

Table I. National culture

scores

Cultural scores Dimensions of national culture USA Finland Poland

Large versus small power distancea 40 33 50 Individualism versus collectivism

a 91 63 60

Strong versus weak uncertainty avoidancea 46 59 70 Masculinity versus femininity

a 62 26 50

Notes: aOn a scale of 1-100, lower scores reflect small power distance, higher scores reflect large power distance; lower scores reflect collectivism, higher scores reflect individualism; lower scores reflect weak uncertainty avoidance, higher scores reflect strong uncertainty avoidance; and lower scores reflect femininity, higher scores reflect masculinity

Sources: USA and Finland – Hofstede (1984b); Poland – Hessels (1996) and Brouthers and Brouthers (2001)

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environment, developing close, mutually satisfying relationships, offering support, and exhibiting trust (aÁ la supportive leadership) should have a somewhat salutary impact on channel member motivation. A similar situation should prevail if channel members are encouraged to participate in decision- making and provide input into problem solving (as in participative leadership). Based on the preceding discussion, then, the following hypotheses are offered:

H1. In the USA, there is a positive relationship between channel leader leadership style and channel member motivation such that: (a) a directive leadership style will have the strongest relationship

with motivation; (b) relative to a directive leadership style, participative and

supportive leadership styles will have weaker relationships with motivation.

Finland. Finland’s national culture scores (see Table I) suggest that this country reflects a small power distance society, can be considered an extremely feminine culture, and is slightly individualistic. This suggests that people generally feel little inequality, view themselves as interdependent, and seek participative decision-making (low power distance). Furthermore, they display concern for others, work in order to make a living, and emphasize solidarity (feminine orientation). Also, individuals are somewhat self-directed, focus on their own accomplishments and successes, and require rules to indicate apropos behavior and rewards (individualistic culture).

Thus, encouraging channel members to participate in channel decision- making and to provide input into problem solving (participative leadership) should be especially effective at enhancing their motivation. Furthermore, building a friendly task environment and creating a favorable task climate (supportive leadership) should further enhance channel partner motivation. Also, offering some degree of structure and direction vis-aÁ -vis channel partners’ role (directive leadership) should assist motivation of channel partners. Accordingly, the following hypotheses are proposed:

H2. In Finland, there is a positive relationship between channel leader leadership style and channel member motivation such that: (a) participative and supportive leadership styles will have the

strongest relationships with motivation; (b) relative to participative and supportive leadership styles, a

directive leadership style will have a weaker relationship with motivation.

Poland. Poland’s national culture scores (Table I) betoken that it manifests a somewhat strong uncertainty avoidance nature. Moreover, it is a bit individualistic, and thus achievement oriented. Yet, Poland apparently is androgenous and exhibits neither large nor small power distance. Thus, Polish society can be described as feeling uncomfortable with ambiguous situations, thus requiring explicit directives to assist in overcoming this situation. And it

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is performance directed, wherein individuals expect rules to be clearly delineated to abet their success. So, the use of a directive leadership style should engender higher levels of channel partner motivation through providing them delineated guidelines regarding channel leader expectations, channel role performance, and channel rewards. Participative and supportive leadership styles, though, may have little impact on channel partner motivation. Thus, the following hypotheses are advanced:

H3. In Poland, there is a positive relationship between channel leader leadership style and channel member motivation such that: (a) a directive leadership style will have the strongest relationship

with motivation; (b) relative to a directive leadership style, participative and

supportive leadership styles will have the weakest relationships with motivation.

Motivation and channel partner performance Channel partner performance can be defined as `̀ the degree to which the channel partner engages in behavior that contributes to the fulfillment of the channel leader’s objectives’’ (Gaski and Nevin, 1985, p. 131). Some channel researchers have made inroads into discerning what influences channel partners to perform effectively in selling the products of the firms they represent (Brown et al., 1995; Kumar et al., 1992, 1995a, b; Spriggs, 1994). Nonetheless, past work in marketing channels has yet to provide adequate understanding of channel partner performance. Examining the motivation/performance linkage may provide insight into channel member performance.

A channel partner’s expectancy should be high if he or she believes that expending effort will lead to a high level of performance. Moreover, because channel partner behavior is goal directed, it should be linked to rewards. In other words, channel partners expend effort with the expectation that performance leads to the attainment of rewards (instrumentalities), and the level of performance on the part of the channel partner will determine the amount of rewards the latter will receive. A channel partner conceivably believes that if he or she exerts more effort and increases market share and achieves sales quotas specified by the channel leader, the latter will offer the higher trade discounts, quantity discounts, cooperative advertising allowances, and other desirable rewards to the channel partner. To the extent these rewards are important to channel partners (valences), the latter will be motivated to perform with the expectation that such rewards will be received (instrumentalities). Therefore, higher levels of channel partner motivation should have a positive impact on channel partner performance.

The foregoing arguments are consistent with those offered by Price (1991a) and have been observed in a channel setting (Arnold et al., 1992; LaFleur et al., 1989), sales management (Oliver, 1974; Tyagi, 1985), and organizational sciences (Campbell et al., 1970; Hackman, 1977; Hackman and Oldham, 1975; Lawler, 1968). No published channel studies have investigated the linkages

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among the three motivational constructs. Based on pertinent literature, there is no logical reason to propose that the motivation/performance linkage will vary across countries. Therefore, the putative relationship is anticipated to be invariant regardless of country. Thus, the following hypotheses are proffered:

H4. In the USA, channel partner motivation is positively related to channel partner performance.

H5. In Finland, channel partner motivation is positively related to channel partner performance.

H6. In Poland, channel partner motivation is positively related to channel partner performance.

Research method Research setting and sample Setting. Data were drawn from marketing channels for new automobiles in the USA, Finland and Poland. These three countries were selected for inclusion in the study because they represent distinctly different cultures and economic orientations. Specifically, these countries differ with respect to dimensions such as power distance, uncertainty avoidance, masculinity-femininity, and individualism-collectivism (e.g. Hofstede, 1980, 1984a, b). Also, the USA is indicative of a highly competitive, free enterprise economy. Finland represents a competitive milieu with a more socialistic bent typically associated with many western European countries. And Poland is associated with the former Communist-bloc culture that, after a half-century’s history, may still be manifest in this country.

Marketing channels from only one industry – automobiles – were surveyed for several reasons. First, focusing solely on a single industry partially controls for the impact that extraneous factors (such as different types of marketing channel systems (conventional and vertical)) may have on the interrelationships posited in the hypotheses. Second, in this industry, transactions among channel participants are usually characterized by long- term relational agreements (Rosenbloom, 1999), and the distribution channel can be characterized by an imbalance of power in favor of the manufacturer (Lusch, 1976). Consequently, automobile manufacturers are cultivating long- term relationships with their automobile distributors and have been known to play the role of the channel leader (Wilson and Mummalaneni, 1986). Third, principal automobile manufacturers and their respective dealers are highly dependent on one another to achieve individual and systemic goals. Therefore, the frequency of interaction between the boundary personnel of the manufacturer and automobile dealership is likely to be high, so interfirm influence attempts are likely to be more evident (Ridgeway, 1957). Fourth, the boundary personnel in the auto dealer’s firm are recipients of interfirm influence attempts and, therefore, should be able to shed light on the leadership styles used by the channel captain.

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Procedure. In the USA and Finland, the survey was administered using a two-step process. In the first phase, a packet containing a cover letter, the survey, and a pre-addressed, postage-paid reply envelope was mailed to all sample members. The second phase of the data collection procedure consisted of mailing a follow-up letter a week later reminding the survey recipients to complete and return the survey within the pre-specified time frame. In Poland, data were gathered via personal interviews conducted by research assistants who hand-delivered the surveys to the key respondents in the automotive dealerships that had agreed to participate in the study. Respondents completed and returned the survey to the respective assistant. In countries where there is a general mistrust of such data-gathering techniques as well as a lack of understanding of contemporary marketing research methods, Jain (1993) and Terpstra and Sarathy (1994) advocate employing alternative data collection procedures. Because these characteristics are manifest in Poland, the study was not administered by mail. Hence, the alternate data collection technique described above was deemed appropriate to utilize.

Sample. A pre-test of the preliminary questionnaire with 15 automobile dealerships indicated that general managers were the most qualified to provide the requisite data because they were primarily responsible for dealing with the boundary personnel of their respective principal automobile suppliers. In the USA, 1,047 questionnaires were mailed to a random sample of general managers representing dealerships for new automobiles. A total of 188 questionnaires were returned within the specified time; 32 surveys were returned as undeliverable. Another 11 questionnaires were considered unusable because of incomplete responses and were discarded from the study. This yielded an effective response rate of 17.4 percent. Using addresses from a registry (Autotuojatry), surveys were mailed to a random sample of 600 Finnish automobile importers. A total of 101 completed surveys was returned yielding a response rate of 16.8 percent. In Poland, 75 randomly selected dealerships located in the surrounding suburbs of a major metropolitan area were approached to participate in the study. Completed surveys were received from 60 dealerships. Eight surveys were removed from the study due to incomplete responses. Thus, the effective response rate was 69.5 percent. These three response rates closely approximate those reported in various empirical investigations on marketing channels (e.g. Bandyopadhyay and Robicheaux, 1997; Gatignon and Robertson, 1989; Heide and John, 1988; Phillips, 1981; Seifert and Ford, 1989).

Assessment of non-response bias. A total of 30 randomly selected non- respondents were contacted by telephone and asked to provide data on general company demographic characteristics (Churchill, 1991). T-tests were used to ascertain if any differences emerged between respondents and non-respondents with regard to key organizational characteristics (e.g. annual sales revenues, number of employees). No significant differences (p > 0.05) in demographic characteristics were detected. Also, a test for non-response bias suggested by Armstrong and Overton (1977) examined the differences between early and late

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respondents on the same set of factors; again, no significant differences were detected. So, non-response bias does not appear to be a major concern in this study.

Instrument A questionnaire was developed to elicit information from principal key respondents (Campbell, 1955; Schwenk, 1985) on distribution channel management practices and demographic characteristics. Based on responses from a pre-test, minor editorial changes were made. Moreover, interviews with key informants in the automobile dealerships helped ensure that the measurement scales captured the constructs of interest in the present study. (Results of psychometric analyses of the scales can be found in the Appendix and Tables II-VIII.)

When conducting cross-cultural studies, each version of the survey should be equivalent. That is, as Adler (1983) suggests, the terminology used in each

Table II. Factor analysis of expectancies

Extracted factor loadings Expectancy items USA Finland Poland

1. Higher sales volume 0.9532 0.8535 0.8416 2. Higher productivity 0.2149

a 0.7578 0.8275

3. Higher market share 0.9570 0.7825 0.7938 4. Better customer service 0.8717 0.8164 0.7294 Percent of total variation 65.8 64.5 63.9 Eigenvalue 2.63 2.58 2.56

Note: a This item measuring expectancy was omitted from the US analysis because it failed to have a significant loading on its corresponding factor

Table III. Factor analysis of instrumentalities and valences

Extracted factor loadings Instrumentality and valence items USA Finland Poland

Instrumentalities 1. Higher trade discounts 0.8812 0.7475 0.7408 2. Higher cooperative advertising 0.7945 0.7921 0.6774 3. Faster delivery of automobiles 0.7616 0.7948 0.6485 4. Better franchising terms 0.8997 0.7775 0.6824 5. Better financial assistance 0.9263 0.7408 0.6020 6. Higher promotional allowances 0.8626 0.6690 0.7068

Valences 1. Higher trade discounts 0.5377 0.5189 0.5852 2. Higher cooperative advertising 0.7049 0.7907 0.5335 3. Faster delivery of automobiles 0.5461 0.5552 0.6133 4. Better franchising terms 0.7848 0.6302 0.5796 5. Better financial assistance 0.8545 0.7836 0.7932 6. Higher promotional allowances 0.7996 0.5597 0.7821 Percent of variation (total) 46.9 20.8 (67.7) 31.5 19.6 (51.1) 24.0 20.7 (44.7) Eigenvalues 5.62 2.49 3.78 2.35 2.89 2.49

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Table IV. Factor analysis of channel leadership

styles

Extracted factor loadings Leadership items USA Finland Poland

Participative leadership style 1. Our dealership has major influence in the

determination of policies and standards for marketing the supplier’s autos

0.8086 0.7394 0.2046

2. Good ideas from our dealership often do not get passed along to the supplier’s headquarters

a

0.5369 0.7052 0.7069

3. Our dealership is not allowed to provide input into the determination of standards and promotional allowancesa

0.7033 0.7822 0.8938

Supportive leadership style 4. There is definite lack of support, coaching, and

feedback from the suppliera 0.8553 0.7618 0.6750

5. Once the supplier sells us their autos they forget all about usa

0.5088 0.8545 0.6486

6. The supplier is highly interested in the welfare of our dealership

0.5974 0.5060 0.1747

Directive leadership style 7. The supplier provides us sufficient guidelines

and careful instructions on how to manage our dealership

0.6792 0.6841 0.3331

8. The rights and obligations of all parties concerned are clearly spelled out in the license agreement

0.7793 0.8070 0.8567

9. We are encouraged to use uniform procedures 0.7979 0.5272 0.8206

Percent of total variation 80.6 62.5 69.9 Eigenvalues for participative leadership 6.06 3.13 3.83 Eigenvalues for supportive leadership 1.00 1.48 1.25 Eigenvalues for directive leadership 0.89 1.02 1.20

Note: a

Item was reversed scored before factor analysis

Table V. Pairwise correlations

for US sample

Variables 1 2 3 4 5 6 7 8

1. Participative leadership 1.000 2. Supportive leadership 0.000 1.000 3. Directive leadership 0.000 0.000 1.000 4. Motivation 0.582 0.473 0.352 1.000 5. Sales volume 0.586 0.461 0.211 0.774 1.000 6. Sales per employee 0.640 0.426 0.179 0.754 0.902 1.000 7. Asset turnover 0.267 0.085 –0.199 0.173 0.370 0.325 1.000 8. Overall performance –0.006 0.318 0.183 0.318 0.421 0.339 0.056 1.000

Note: All pairwise correlations > 0.16 significant beyond p < 0.05

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version of the survey instrument should be relevant to the specific country being investigated. Additionally, following the procedures advocated by Brislin (1970) and Werner and Campbell (1970), the questionnaire was first translated into Finnish and Polish. To maintain equivalence, the surveys were back-translated into English (Sekaran, 1983). The back-translated survey was then compared to the original to assess conformity.

Channel partner motivation. Following Tyagi (1982, 1985) and Oliver (1974), expectancy was operationalized by asking the respondent to indicate the

Table VI. Pairwise correlations for Finland sample

Variables 1 2 3 4 5 6 7 8

1. Participative leadership 1.000 2. Supportive leadership 0.000 1.000 3. Directive leadership 0.000 0.000 1.000 4. Motivation 0.160 0.096 0.235 1.000 5. Sales volume –0.043 0.000 0.158 0.419 1.000 6. Sales per employee –0.086 0.005 0.221 0.493 0.890 1.000 7. Asset turnover 0.281 0.069 –0.048 0.623 0.457 0.441 1.000 8. Overall performance 0.087 0.236 0.058 0.286 –0.142 –0.069 0.059 1.000

Note: All pairwise correlations > 0.20 significant beyond p < 0.05

Table VII. Pairwise correlations for Poland sample

Variables 1 2 3 4 5 6 7 8

1. Participative leadership 1.000 2. Supportive leadership 0.000 1.000 3. Directive leadership 0.000 0.000 1.000 4. Motivation 0.084 –0.059 –0.256 1.000 5. Sales volume 0.305 –0.241 –0.262 0.100 1.000 6. Sales per employee 0.357 –0.534 –0.378 0.224 0.618 1.000 7. Asset turnover 0.120 –0.803 –0.684 –0.141 0.993 0.991 1.000 8. Overall performance 0.160 –0.449 –0.060 0.178 0.208 0.443 0.482 1.000

Note: All pairwise correlations > 0.40 significant beyond p < 0.05

Table VIII. Reliability estimates

Coefficient alphas Constructs USA Finland Poland

A. Leadership measures Participative leadership style 0.87 0.65 0.65 Supportive leadership style 0.87 0.70 0.74 Directive leadership style 0.83 0.64 0.67

B. Motivation measures Expectancy 0.92 0.81 0.81 Instrumentality 0.93 0.82 0.76 Valence 0.82 0.72 0.69

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probability (using a chances in ten format) that an increase in dealership effort would lead to higher productivity, higher sales volume, higher market share, and better customer service. The response format for this ten-point scale ranged from `̀ very unlikely’’ (1) to `̀ very likely’’ (10). Prior to data analysis, a composite for this construct was derived by summing the raw scores of the items that loaded significantly on its corresponding latent dimension (see Table II).

Instrumentality was assessed by asking respondents to indicate the probability that increased rewards would be received from the manufacturer if the dealership increased performance. Six rewards were used:

(1) higher trade discounts;

(2) higher cooperative advertising;

(3) faster delivery of automobiles;

(4) better franchising terms;

(5) better financial assistance; and

(6) higher promotional allowances.

These rewards (see Table III) were constructed by reviewing the literature on channel partner motivation (e.g. Rosenbloom, 1978, 1999) and by interviewing key informants. Following Teas (1981, 1982), the likelihood of the occurrence of these rewards was assessed using a five-point Likert-type scale – `̀ no chance to occur’’ (1) to `̀ certain to occur’’ (5).

Following Tyagi (1982, 1985), valence was operationalized by asking respondents to rate the desirability of each of the six rewards from the instrumentality items identified above on a five-point scale – `̀ very undesirable’’ (1) to `̀ very desirable’’ (5). Only those instrumentality and valence items that loaded significantly on their respective latent dimensions were used in the final data analysis (see Table III). A composite index of channel partner motivation was computed by using the procedure defined in equation (1) (described earlier).

Leadership styles. Leadership styles were assessed using scales originally developed by Schul et al. (1983) and utilized in channel investigations (Price, 1991b; Schul, 1987; Schul and Babakus, 1988). Considered to be seminal scales (Bearden and Netemeyer, 1998; Bruner and Hensel, 1992), each consists of three items that assess participative, supportive, and directive channel leadership styles (see Table IV). Respondents were asked to rate on a Likert scale – `̀ strongly disagree’’ (1) to `̀ strongly agree’’ (5) – the extent to which the channel leader uses the behavior exhibited in each item.

Although the leadership scales employed have been used in previous channel studies and have demonstrated adequate psychometric properties, a caveat about them is in order. The leadership items were developed in a US context. As noted earlier, the USA, Finland and Poland are not culturally homogenous. Each of these nations has its own unique set of values, beliefs, credos, and precepts that permeates the business (and channels) milieu. As

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such, a given business practice (such as leadership style) that is appropriate and applicable in one country (e.g. the USA) may not be easily transferable to another (e.g. Finland or Poland). Because the leadership scales were uniquely US oriented and not developed in Finnish and Polish settings, their relevance to these two countries is uncertain and, therefore, is an empirical question.

Channel partner performance. Because the performance of the overall marketing channel is determined to a large extent by the performance of individual channel partners comprising the channel, this study assesses the performance of individual channel partners in terms of channel efficiency. Channel efficiency is measured by two indices: productivity and profitability. Channel productivity refers to the efficiency with which output is generated from resources and inputs that are used or expended (Stern et al., 1996). For instance, sales per employee is an indicant of channel productivity that measures the efficiency in using inputs (measured in terms of labor and capital) to generate outputs (measured in terms of revenue, gross margins, and value added). Channel profitability is a general indicator of the financial performance of channel partners in terms of return on investment, growth in profits, and liquidity leverage, among other indices. It denotes how efficiently marketing channel partners utilize their financial resources and, thus, represents economic success or factors related to it (Rosenbloom, 1979, 1999).

Four measures of channel partner performance were examined in this study. They are:

(1) asset turnover;

(2) annual sales revenue;

(3) sales per employee (a general measure of channel productivity) (Stern et al., 1996); and

(4) a perceptual measure that asked respondents to rate the level of overall performance of the automobile dealership on a seven-point scale – `̀ poor’’ (1) to `̀ excellent’’ (7).

Admittedly, channels are established with a long-run perspective. The nature of the manufacturer/intermediary relationship influences long-run channel performance. Nonetheless, only short-term performance indicators were employed for two reasons. First, previous channel research has assessed performance in a similar fashion (e.g. Brown et al., 1995; Kumar et al., 1992, 1995a, b; Spriggs, 1994). Consequently, we chose short-term performance to be consistent with extant work. Second, use of short-term performance data facilitated data collection. Requiring respondents to provide performance of a long-term (i.e. historical) nature would have necessitated increased respondent effort (i.e. searching for and perusing germane company documents). This requirement would likely have reduced the response rate or possibly even led to the provision of `̀ guesstimates’’ from respondents. In efforts to prevent such respondent behavior, we chose to assess solely short-term channel performance. Scholars have admonished researchers to be cognizant of the

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dramatic impact that costs/efforts have on response rates and data quality (Yammarino et al., 1991).

Data analysis Data were analyzed using two different statistical procedures. First, results of an analysis of variance (ANOVA) indicated that there was a statistically significant difference in the perceived use of participative (F-value = 28.01, p < 0.001), supportive (F-value = 24.114, p < 0.001), and directive leadership (F- value = 59.934, p < 0.001) styles in the USA, Finland and Poland. These findings suggested that assessing the impact of leadership styles on channel partner motivation in each of the countries separately is appropriate. The second statistical procedure consisted of using regression analysis to test the hypotheses. Based on the foregoing results and to be consistent with practices in multi-country empirical investigations (Douglas and Craig, 1983, 1999), separate regression analyses were computed for the USA, Finland and Poland samples. As posited in H1, H2 and H3, this study seeks to explain which leadership styles are given more importance in eliciting higher channel partner motivation. Thus, the standardized beta coefficients were examined – as suggested by Dillon et al. (1994) – who indicate that the greater the value, the more important the variable.

Results Leadership styles-channel partner motivation The results of the multiple regression analyses with channel partner motivation as the criterion variable are provided in Table IX. Findings for the USA suggest that all three leadership styles have a significant, positive impact on channel partner motivation (as expected). Collectively, these leadership styles explain 68.7 percent of the variation in motivation (F-value = 125.1, p < 0.000). The beta coefficients reveal that a participative leadership style is most strongly associated with motivation, followed by a supportive leadership style

Table IX. Regression results for

channel partner motivation

Sample Criterion Predictors

Standardized beta

coefficient t Overall

F p R2

USA Motivation Participative leadership a

Supportive leadershipa

Directive leadership a

0.5820 0.4734 0.3528

13.68* 11.13* 8.29*

126.73 0.000 0.687

Finland Motivation Participative leadershipa

Supportive leadership a

Directive leadershipa

0.2352 0.0960 0.1609

2.26* 0.92 1.55

2.78 0.040 0.092

Poland Motivation Participative leadership a

Supportive leadership a

Directive leadership a

0.0848 –0.0595 –0.2566

0.61 –0.46 –1.85

1.33 0.280 0.077

Notes: a These constructs were represented by their respective factor scores *p < 0.001 (two-tailed)

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and then a directive leadership style. A directive style, however, was posited as having the strongest association with motivation, and the other two styles were presumed to have weaker relationships with motivation. Thus, no empirical support is provided for H1a or H1b.

The results for Finland indicate that participative, but not directive nor supportive, leadership style is significantly and positively associated with channel member motivation. The independent variables explain 9.2 percent of the variance in motivation (F-value = 2.78, p < 0.05). Thus, the beta coefficients indicate that participative leadership style has the only significant effect on channel member motivation. Participative and supportive leadership, though, were expected to have a strong impact on motivation, and directive leadership was anticipated to have a weaker influence on it. As such, there is only partial empirical support for H2a and H2b.

With respect to Poland, the three leadership styles – collectively – are unrelated to channel member motivation, as the overall F-value of 1.33 is not significant (p > 0.05). Thus, there is no empirical support for the relationship between leadership styles and motivation in Poland, as posited in H3a and H3b. In summary, the findings essentially are incongruent with expectations pertaining to the leadership style/channel member motivation linkage in the USA, Finland and Poland.

Motivation-channel partner performance The results of the regression analyses of the effects of channel partner motivation on sales volume, sales per employee, asset turnover and overall performance – the four indices of channel partner performance – are presented in Table X. For the USA sample, channel partner motivation explains 55.9 percent of the variation in sales volume, 56.8 percent of the variation in sales per employee, 3.0 percent of the variation in asset turnover (a non-significant model, though), and 10.2 percent of the variation in overall performance. Thus, there is general support for H4, which posits that higher channel partner motivation will be associated with higher performance in the USA.

In the Finnish sample, there is a positive relationship between channel partner motivation and performance. More specifically, the findings are significant for all four of the performance measures, thus supporting H5. Motivation explains 17.5 percent of the variation in sales volume, 24.4 percent of the variation in sales per employee, 38.9 percent of the variation in asset turnover, and 8.2 percent of the variation in overall performance in the Finnish sample.

With regard to the Polish sample, the findings reveal that channel partner motivation is not significantly related (p > 0.05) to performance for any of the four performance measures. Therefore, H6 receives no support.

Discussion This study explored the impact of alternative channel influence strategies for motivating channel partners; it did so by investigating the association between channel leader leadership style and channel member motivation. To be

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compatible with the literature on cross-cultural management, which suggests that the use of a given leadership style is contingent on the cultural context (Francesco and Gold, 1998; Hofstede and Bond, 1988; Kreitner, 1995; Rodrigues, 1990), the study examined if the relationship between leadership style and channel partner motivation is moderated by national culture. The context involved automobile dealers in the USA, Finland and Poland.

The results of this study are important in the context of the current global environment. As noted earlier, interorganizational relationships today can be characterized as increasingly integrated and interdependent. Moreover, there is a call for a more collaborative or `̀ partnership’’ approach to channel management. Additionally, some international scholars aver that cultures are converging and, thus, management practices can be transferred across national markets. With regard to leadership styles and channel management practices, however, the disparate findings of this study are consistent with other researchers who assert that despite the standardization of products and services, cultures are seemingly somewhat resistant to change and that cultural differences require adaptation of management practices (Barkema and Vermeulen, 1997; Erez, 1986; Hofstede, 1980, 1991; Morris and Pavett, 1992; Newman and Nollen, 1996; Welsh et al., 1993). Thus, the results provide support for the view that despite developments in travel and communication that appear to be `̀ shrinking’’ the world and conducing to cultural convergence, there are still cultural differences across nations that seemingly require adaptation of management styles in different countries.

Table X. Regression results for

channel partner performance

Sample Criterion Predictor

Standardized beta

coefficient t Overall

F p R 2

USA Sales volume Motivation 0.7740 15.98* 255.52 0.000 0.559 Sales per employee Motivation 0.7543 15.02* 225.71 0.000 0.568 Asset turnover Motivation 0.1607 2.13* 4.51 0.352 0.030 Overall performance

Motivation 0.3188 4.45* 19.80 0.000 0.102

Finland Sales volume Motivation 0.4188 1.99* 3.96 0.040 0.175 Sales per employee Motivation 0.4937 2.41* 5.80 0.027 0.244 Asset turnover Motivation 0.6233 2.52* 6.36 0.030 0.389 Overall performance

Motivation 0.2860 2.11* 4.45 0.039 0.082

Poland Sales volume Motivation 0.1001 0.030 0.007 0.979 0.010 Sales per employee Motivation 0.2236 0.597 0.356 0.553 0.050 Asset turnover Motivation –0.1420 –0.790 0.627 0.434 0.020 Overall performance

Motivation 0.1781 1.68 2.82 0.097 0.032

Note: * p < 0.001 (two-tailed)

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Explanations for unanticipated findings Study findings indicated that the leadership style/motivation linkage in a channel setting is moderated by national culture. Although the results did reveal that the leadership style used to motivate channel members varies across countries, the findings generally were not consonant with the posited hypotheses. This lack of consonance can be explained in terms of Hofstede’s (1980, 1984a) four cultural dimensions: individualism/collectivism, uncertainty avoidance, power distance and masculine/feminine.

USA. Channel partner motivation apparently is especially increased in the USA to the extent that channel leaders employ a participative leadership style; motivation is augmented, but to a lesser degree, when supportive leadership is employed. Furthermore, directive leadership has a positive impact on motivation, but a relatively weaker one compared to the other two styles. These findings are in stark contrast to the hypotheses, which posited that directive leadership would have the strongest impact on channel member motivation vis- aÁ -vis the other two leadership styles.

The USA is a highly individualistic county, a culture in which people strive to achieve an active role where their contributions will be noted and valued. In this type of society, seemingly participative and supportive leadership styles where the channel leader provides a foundation from which the channel partner can build and then `̀ gets out of the way’’ to let the channel partner carry out its responsibilities would be particularly effective. In addition, the USA is a weak uncertainty avoidance culture where, although there are rules, they are considered more a matter of convenience than immutable law, and thus may be changed (therefore muting the effect of directive leadership). A comfortable, friendly environment would be valued over a rigid environment (aÁ la directive leadership). Consequently, a weak uncertainty avoidance culture is consistent with supportive and participative leadership styles. As such, then, US channel arrangements apparently employ directive leadership, but to a far lesser degree than participative and supportive leadership styles. In essence, a `̀ reserved’’ directive leadership provides requisite guidance to channel partners, and that guidance can be parlayed through participative and supportive leadership efforts.

Finland. The US situation is in contrast to the Finland setting where a participative leadership style was found to be especially motivating to channel partners, yet they seemingly receive no fillip under a directive or supportive leadership style. Although the finding for participative leadership was anticipated, supportive leadership was also expected to have a salutary impact on channel member motivation, while directive leadership was to have a lesser effect on motivation than the other two styles.

Finland is much less individualistic than the USA. In fact, it tends to have some features of collectivist societies, which are more motivated by group interests, and belief is placed in the group’s decision. Furthermore, individuals’ opinions are essentially established by those groups, and absolute loyalty is owed to the group or organization. Thus, individuals in such a culture seemingly would expect that everyone in the group would `̀ pitch in’’. Also,

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there is the expectation of having the group determine what, how, and when a task is accomplished. These characteristics are indicative of a participative leadership style.

Also, Finland’s score on the uncertainty avoidance dimension implies that it experiences a moderate degree of this feature. As such, Finnish society is somewhat uneasy in uncertain or ambiguous situations and experiences anxiety and stress; moreover, there is a degree of intolerance for variant behavior or ideas. These conditions conduce to a need for consensus. Again, the use of a participative leadership would logically flow from the foregoing situation. Furthermore, Finland is a relatively low power distance country; that is, it evinces a culture that does not accept power being distributed unequally among its members. In this type of culture, participation in decision-making is encouraged. Thus, this would be consistent with a participative leadership style. Furthermore, Finland scores clearly on the feminine end of the masculine/ feminine dimension. Feminine cultures tend to emphasize equity and peoples’ welfare, which is compatible with a participative leadership style. Given the preceding situation, the impact of participative leadership vis-aÁ -vis supportive and directive leadership on channel member motivation is scrutable.

Poland. With respect to Poland, there was a total lack of support in Poland for any of the posited hypotheses. None of the three leadership styles was related to channel member motivation, nor was motivation linked to channel member performance. Thus, the results do not support the theory. This phenomenon may be partially explained by Poland’s history. Some cultures are resistant to change or simply take a long time to change. According to Paliwoda (1997), the Poles in the short run may be having difficulty adapting to the replacement of their old planned economic system with a capitalistic economy. National culture takes time to change. So, although Poland’s economy has been modified dramatically, fairly quickly, some organizations may find that accommodating to the new means of conducting business is fraught with problems. Directive leadership may have a muted effect on channel partner motivation because the increased emphasis of rules may resonate of the former militaristic type, command economy strategy of `̀ forced’’ participation. Also, participative and supportive leadership styles may be too foreign or seem too incongruent with the protean economic milieu in Poland to have a positive impact on channel member motivation. Under the former Communist rule, the Poles were subjected to an extreme form of a directive leadership style where individuals typically did as they were told and disagreement was not permitted. Being allowed input on key strategic issues or being afforded a climate of mutual trust, respect, and psychological support may be such novel experiences for channel members now, that they are not psychologically equipped to operate in such environments. Consequently, the association between motivation and participative and supportive leadership styles may be vitiated.

Another possible rationale for the finding that channel member motivation is not related to channel member performance in Poland may again be

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attributed to the degree of development of market channels in this relatively new free market economy. Because Poland is still an economy that is transitioning to a capitalistic system, possibly the type of rewards channel partners might expect to receive (aÁ la instrumentality) might not be considered important to them (aÁ la valence); thus, they may not put forth high levels of effort (aÁ la expectancy). This finding suggests channel leaders need to understand that rewards that may be valued as important in one country may be considered unimportant, or even inappropriate, in others. Additionally, perhaps motivation leads to increased performance only when the marketing system achieves a certain level of development and maturity.

The findings for Poland may also partially be attributable to the transitional nature of the Polish business environment and the development of channel structures (i.e. the set of institutions that perform the distribution functions necessary to make products and services available between producers and final users). In industrialized and mature economies (e.g. the USA, Great Britain, Germany), channel structures are consciously designed and managed, and distribution functions are allocated to those institutions most capable of performing them effectively and efficiently. Franchising systems are a quintessential example of planned distribution channel structures where virtually the performance of all distribution tasks is specified and incorporated into legally binding contracts between franchiser and franchisee (Dunne and Lusch, 1998). In emerging economies, however, distribution channel structures are seldom consciously planned and managed. Rather, they are likely to have evolved. Conceivably, then, the development of effective channel structures and institutions in Poland is in a relatively nascent (about a decade) stage, thus affecting the findings accordingly.

Moreover, given their short experience with Polish channel members and distributive institutions, Western corporations and managers may not fully understand the special marketing conditions of an economy in transition. For example, they may not yet be conversant with the preferences and motives of buyers, individuals who are inured to a much lower standard of living than that of buyers in Western nations such as the USA. Therefore, possibly the real reason for the behavior and attitude of channel partners toward Western management styles and philosophies may not be so much a problem of `̀ mental heritage’’ rooted in the former planned economic systems, but much more of a forced reality of their present economic and social conditions[2].

Managerial implications Although some prior work (noted earlier) promulgates that standardization should be the zeitgeist for international marketers (including channel managers), the findings from this study imply that channel leaders should be extremely circumspect about attempting to standardize channel strategies. Because the nexus between channel leadership style and channel partner motivation is seemingly inconsistent across cultures, channel management

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strategies should be culture specific. Thus, the time is not yet ripe for disseminating a `̀ one size fits all’’ strategy for motivating channel partners.

Relative to supportive and directive leadership styles, the use of a leadership style that allows participation in decision-making generates higher levels of motivation from channel partners in the USA and Finland. Therefore, as inter- firm influence strategies, a participative leadership style can be effective in eliciting greater effort on the part of channel partners in these two nations. Therefore, US and Finnish channel leaders should afford channel partners opportunity to have major input on key channel issues; moreover, channel leaders should actually use that input rather than giving mere lip service to soliciting channel member suggestions. So, channel leaders should regard channel partners as possessing critical knowledge and information that will be valuable in the formation of channel strategies and tactics. In essence, channel leaders should be genuinely interested in what channel partners have to say.

Channel partner motivation was found to be positively related to channel partner performance in the USA and Finland. This suggests that channel leaders need to be vigilant about creating motivational programs that can conduce to effective channel member performance. To do so, channel members should be informed about how increased effort will enhance their performance (aÁ la expectancies). Also, channel leaders need to instruct channel members on how their performance can lead to the receipt of certain rewards (aÁ la instrumentalities). Moreover, channel leaders should identify what rewards are particularly salient to their partners, the requisite magnitude of those rewards, and the frequency with which they need to be dispensed (aÁ la valences).

Limitations of the study There are some shortcomings with regard to the research design and methodology of the investigation. First, while marketing channels comprised different types of channel participants (agents, wholesalers, distributors, etc.), data were only sought from automobile dealerships. Consequently, the findings may not be generalizable to other kinds of retailers as well as to other types of channel intermediaries. Second, the study was conducted only in international marketing channels for consumer products; thus, the findings may not apply to channels for industrial products or services channels. Third, because key informants provided all the responses to the explanatory and criterion variables, the percent of variation may have been artificially inflated due to common method variance. Fourth, only short-term performance indicators were utilized; whether similar results would have been obtained using long- term performance measures is an empirical question. Fifth, the provenance of the scales used in the study is the USA; therefore, their appropriateness in European channel settings is uncertain.

Directions for future research Several avenues for future research are suggested. First, the research hypotheses should be tested on data drawn from other distributive institutions

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in different industries. Second, future research is recommended for the development of better operationalizations of leadership styles, which, as this study indicates, is important in engendering channel partner motivation. Third, although power and the bases of power have been the subject of intensive investigation in channels research, their impact on channel partner motivation is not known. Future studies should help identify which power bases will have a significant effect on channel partner motivation. Also, subsequent empirical work should consider the nature and impact of cooperation in international channels and how these affect channel partner motivation and performance. Finally, future research needs to assess if there are differences in the relationship between leadership styles and channel partner motivation in conventional versus vertical marketing channel systems.

Notes

1. Working in concert with a group of Chinese scientists, Hofstede and Bond (1988) have identified a fifth dimension, Confucian dynamism (also known as long- versus short-term orientation). However, there is some evidence that this fifth dimension and the original individualism-collectivism dimension are not independent and highly correlated (Yeh and Lawrence, 1995). Consequently, in this study the original four national culture dimensions are employed)

2. The authors gratefully acknowledge one of the anonymous reviewers for providing this insightful idea.

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Appendix Construct validity The scales used to operationalize expectancy were subjected to a separate factor analysis for each country. Varimax, orthogonal rotation with latent root criterion (eigenvalue = 1.0) was employed. For the US sample, the results indicated that the principal extracted factor (eigenvalue = 2.63) accounted for 65.8 percent of the variation in the measurement scales, although item two, which displayed a low factor loading, was deleted from the analysis (see Table II). With respect to the Finnish sample, the primary factor that emerged (eigenvalue = 2.58) explained 64.5 percent

Leadership style, motivation and

performance

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of the variation in the scales. The results of the factor analysis in the Polish sample indicated that the principal factor that emerged accounted for 63.9 percent of the variation in the scales (eigenvalue = 2.56). Therefore, the factor structure for each sample was consistent with the original unidimensional representation of the expectancy construct.

A separate factor analysis using varimax rotation was performed for each country on the instrumentality and the valence items in an effort to assess the psychometric properties of convergent and discriminant validity (see Table III). As expected, the varimax rotated factor matrix yielded differential factor loadings on two significant principal latent factors, with each of the six items predominantly loading on their designated a priori factors. More specifically, the scales accounted for 67.7 percent of the variation (eigenvalue for instrumentality = 5.62; valence = 2.49) in the US sample. For the Finnish sample, the scales cumulatively accounted for 51.1 percent of the variation (eigenvalue for instrumentality = 3.78; valence = 2.35). For the Polish sample, the scales cumulatively accounted for 44.7 percent of the variation (eigenvalue for instrumentality = 2.89; valence = 2.49). A cut-off of 0.50 was used for item selection with all original items being retained in the analysis.

The leadership scales were analyzed for construct validity for each sample separately (Churchill, 1979; Peter, 1981). Employing a varimax, orthogonal rotation, the factor analysis in the US sample yielded a three-factor solution that cumulatively accounted for 80.6 percent of the variation in the channel leadership scales (see Table IV). Using 0.50 as a cut-off for factor selection, all the items loaded significantly on their corresponding a priori constructs. The eigenvalues for participative and supportive leadership styles were 6.06 and 1.00, respectively. Although the eigenvalue for directive leadership style was not overly significant (>1.0), this factor was retained in the analysis given the theoretical nature of the leadership construct and the strengths of the coefficients for items loading on this factor consistent with Schul et al. (1983). For the Finnish sample, the three extracted factors explained 62.5 percent of the variation in the leadership scales. The eigenvalues were 3.13 for participative leadership style, 1.48 for supportive leadership style, and 1.02 for directive leadership style. With regard to the Polish sample, the results also yielded a three-factor solution that accounted for 69.9 percent of the variation in the scales. The eigenvalues for participative, supportive, and directive leadership styles were 3.83, 1.25, and 1.20, respectively. However, item one representing participative leadership, item six representing supportive leadership, and item seven representing directive leadership displayed low factor loadings; they were retained, though, as advocated by Hair et al. (1998), owing to the theoretical nature of the constructs.

In general, the factor analysis results of the channel leadership scales are consistent with those reported in other studies where these measures have been used (Price, 1991b; Schul, 1987; Schul and Babakus, 1988; Schul et al., 1985, 1983). Finally, the measures for participative, supportive, and directive leaderships styles were represented by their extracted factor scores.

Internal consistency To assess the internal consistency of the multi-item scales used in this study, Cronbach alpha was computed (Cronbach, 1951). The reliability estimates that are reported in Table V reveal that in the USA the alphas ranged from 0.83 to 0.87 for leadership styles and from 0.82 to 0.93 for the motivation measures. For the Finland sample, the alphas ranged from 0.64 to 0.70 for leadership styles and from 0.72 to 0.82 for the motivation scales. In Poland, the alphas ranged from 0.65 to 0.74 for leadership styles, while they ranged from 0.69 to 0.81 for the motivation measures. Because reliabilities exceeding 0.60 are considered to be sufficient (Nunnally, 1978), scales in this study exhibit adequate reliability.