Leadership and cooperation in marketing channels

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Leadership and cooperation in marketing channels: A comparative empirical analysis of the USA, Finland and Poland Rajiv Mehta

Marketing channels

633 Received October 1999 Revised June 2000 Accepted July 2000

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

Trina Larsen and Bert Rosenbloom Drexel University, Philadelphia, Pennsylvania, USA

Jolanta Mazur Warsaw School of Economics, Warsaw, Poland, and

Pia Polsa Swedish School of Economics and Business Administration, Helsinki, Finland Keywords Leadership, Co-operation, Marketing channels, USA, Finland, Poland Abstract Marketing channels exist in an increasingly competitive international and global environment. Consequently, many firms have reengineered their marketing channels systems by placing greater emphasis on fostering higher levels of cooperation among international channel participants. However, there are relatively few studies that explore cross-cultural issues in marketing channels. Thus, investigating whether cultural differences influence how channel participants react to a firm’s channel strategies is an important issue that needs to be addressed. This study comparatively examines channel leadership styles, cooperation, and channel member performance across three divergent national cultures. More specifically, the study seeks to assess whether employing uniform channel strategies produces similar responses from channel members in different countries. Using data drawn from a sample of automobile dealerships in the USA, Finland, and Poland, inconsistent results were found, which suggest that using leadership styles to foster cooperation among channel members across different national cultures on a standardized basis is not an appropriate channel strategy. Based on the findings, international channel management implications, limitations, and directions for future research are proferred.

Marketing channels around the globe exist in an increasingly competitive environment and technology is accelerating the rate of change for businesses. In response to these developments (Johnson, et al., 1993), many firms have taken the initiative to re-engineer their marketing channel systems by forging coalitions and alliances across nations. Additionally, as a result of stiff competition domestically, many firms are discovering the opportunities available to them in foreign markets (Cateora and Graham, 1999). Despite these This work is supported, in part, by New Jersey Institute of Technology, University Heights, Newark, NJ 07102, under Grant No. 4-21840. The authors gratefully acknowledge the reviewers and the editor for their valuable input on earlier versions of this manuscript.

International Marketing Review, Vol. 18 No. 6, 2001, pp. 633-666. # MCB University Press, 0265-1335

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trends toward more cross-cultural interactions in marketing channels, few studies have explored cross-cultural issues in marketing channels (see, for instance, Johnson et al., 1993; Frazier et al., 1989; Kale, 1986; Bandyopadhyay et al., 1994). Thus, investigating whether cultural differences influence how channel participants react to a firm’s marketing channel strategies is an important issue. For marketers operating in foreign markets, it is necessary to assess whether cultural differences influence how channel participants react to marketing channel strategies. That is, will a particular strategy elicit the same response in different markets? This issue has been debated for decades in the guise of the viability and appropriateness of standardization across national markets (Buzzell, 1968; Levitt, 1983; Porter, 1986), and has re-emerged recently (Aggarwal, 1995; Black and Lyman, 1991; Bigoness and Blakely, 1996; Dyer and Song, 1997; Rosenbloom et al., 1997; Whitelock and Pimblett, 1997). While some academicians assert that cultures, managerial values, and managerial practices are converging (Misawa, 1987; Harpaz, 1990; Ralston et al., 1992), others assert that divergence is more common (Erez, 1986; Morris and Pavett, 1992; Welsh et al., 1993), and the latter now strongly outnumber the former (Redding, 1994). Those arguing for convergence state that globalization and change in technology lead to standardization, increasingly similar cultures, and universal management practices. Those arguing for divergence hold that despite the standardization of products and services, cultures are resistant to change, cultural differences are fairly stable over time, and different cultures require different management practices (Newman and Nollen, 1996; Hofstede, 1980, 1991; Barkema and Vermeulen, 1997). Further, regardless of academic findings, it appears that many US companies are operating under the belief that the transferability of management practices without concern for cultural differences is a viable strategy (Callahan, 1989; Flikkema, 1998). This study seeks to investigate the transferability of management practices across cultures in a marketing channels context. The marketing channel, which can be defined as the external contractual organization which management operates to achieve a firm’s distribution objectives (Rosenbloom, 1999), has continued to play an important role in the flow of goods from the manufacturer to the ultimate user of the product. Recently, many researchers have suggested that by adopting a relational exchange (relationship marketing) philosophy, marketing channels can be used to attain a competitive advantage (Anderson and Narus, 1991; Dwyer et al., 1987; Fontenot and Wilson, 1997; Heide and John, 1992; Lusch and Brown, 1996; Morgan and Hunt, 1994; Paswan, et al., 1998; Webster, 1992). Further, Fontenot and Wilson (1997) maintain that the adoption of a relational philosophy leads to the development of long-term buyer-seller relationships and an increased emphasis on cooperation among the parties. Thus, there is a need for understanding what fosters cooperation in these marketing channel partnerships and the implications for marketing channel strategy and performance.

However, it is important to point out that while the participants involved in relational exchanges may be viewed as strategic partners, even within these arrangements, partner asymmetries may exist which can create unequal distributions of power (Harrigan, 1988). The resulting dependence need not be viewed as a ``negative’’, as it has been found to positively affect the strategic integration of inter-firm relationships in marketing channels (Johnson, 1999). Thus, as all partners may not be equal, a dominant alliance partner may emerge as a de-facto leader to aid the integration of the channel and foster cooperation among channel partners. Consequently, the need for leadership in marketing channels continues to be important in the era of relationship marketing. In addition to leadership, culture remains an important factor for marketing channels. Marketing channels, as part of the institutional exchange infrastructure, are significantly influenced by the cultural environment within which they exist. Indeed, numerous studies conducted all over the world have shown that culture is a major force affecting marketing channel structure and strategy. Studies of channels for consumer goods in Egypt, India, Japan, tropical Africa, Turkey, and Venezuela conducted (Wadinambiaratchi, 1965) found wide variations in channel structures and processes which he attributed to their different ``social, psychological, cultural and anthropological climates’’. Classic studies of distribution channels in the UK and North America (Hall et al., 1972) in Western Europe (Guirdham, 1972), Puerto Rico (Galbraith and Holton, 1955), tropical Africa (Baker, 1965) and numerous others lend additional support to the influence of culture on marketing channels. Consider, for example, the case of tropical Africa. In some of the countries it is not unusual to find as many as ten levels of channel structure for imported consumer goods. Most of the very small intermediaries (traders) deal in tiny quantities of products such as a handful of salt, half a bar of soap, or two or three cigarettes. Western observers of the channels are often appalled by this, and believe such channels to be highly irrational and inefficient. These observers, however, make the mistake of failing to consider the cultural context within which this channel structure exists. In actuality, the seemingly archaic channels with layer upon layer of tiny middlemen are quite rational when due allowance is made for the socio-cultural factors involved. In terms of tropical Africa these include wide geographical dispersion of the population, extremely limited consumer mobility and a necessary tradition of hand-to-mouth buying. Given these conditions, a modern Western-style supermarket channel would actually be highly irrational and inefficient. Yet even in highly industrialized Japan with the world’s second largest economy and some of the most advanced technology, marketing channels for many goods are very long and cumbersome, with layers of middlemen and enormous numbers of tiny stores. Researchers who have examined Japanese marketing channels point to a number of cultural factors that account for the seemingly primitive distribution channels in Japan. One of these is the historical Japanese penchant for developing close business relationships

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among cooperating firms ± a system known as keiretsu ± which, in the context of distribution, links together a manufacturer and many wholesalers and retailers. Such linkages protect the many small inefficient distributors and retailers who participate in the keiretsu from competition from larger and more efficient firms who are effectively kept out of the system. Several other sociocultural factors also contribute to the complex and inefficient channel structure in Japan. Some of the most frequently cited of these are a societal attitude that favors small businesses (particularly small retailers) in the distributive sector of the economy; the Japanese consumer’s preference to shop in his or her own neighborhood; a desire for fresh foods, good personal service, and social contact during sales transactions; a priority on maintaining low unemployment rate by encouraging the existence of many small stores where people can work; and a desire for ``something to do’’ during retirement. This study comparatively examines the impact of leadership style on cooperation, which, in turn, influences channel member performance across three divergent national cultures. More specifically, it seeks to assess whether employing uniform channel strategies produces similar responses from channel members in the USA, Finland, and Poland. The manuscript first reviews the germane literature on each of the constructs before the linkages among leadership, cooperation, culture, and channel member performance in the form of research hypotheses are offered. Next, the research methodology is described, which is followed by the findings of the study. The managerial implications are discussed, the limitations of the study are identified, and directions for future research are suggested. Leadership Ridgeway (1962) stated that the marketing channel needs to function effectively as an integrated system in order to reduce the redundancy of work effort and the inefficient allocation of distribution tasks among channel participants. Because an integrated channel is viewed as a social system where cooperative efforts are needed to achieve super-ordinate goals, leadership on the part of a particular channel participant is needed to foster cooperation among the channel members to achieve these objectives. Yet, leadership is not an automatic occurrence in marketing channels. That is, just as in the case of exercised and unexercised power, leadership behavior may or may not be exercised by a channel member. The fact that a channel member appears to be in a position to exercise leadership does not mean that it will do so, in which case the channel continues to operate, but it may do so in a ``rudderless’’ fashion. Thus, there can be numerous situations where marketing channels operate without any conscious effort on the part of any particular channel member to engage in leadership behavior. Channel leadership represents the activities undertaken by a particular channel member to influence the marketing polices and strategies of other channel participants so as to control various aspects of marketing channel operations (El-Ansary and Robicheaux, 1974; Price, 1991a, b; Schul et al., 1983).

Influence is accomplished by the channel leader exercising appropriate channel leadership behaviors to induce target channel members to cooperate and, in the process, perform at a superior level (Stern et al., 1996). Research on the schools-of-leadership theory, thought and practice can be broadly categorized into the trait approach, the behavioral approach, the situational approach, and the power-influence approach (Stoner et al., 1995; Higgins, 1994; Yukl, 1981). In general, leadership theories focus on the ways in which a leader can effectively bring about collaboration as well as compliance from subordinates. For many years researchers in marketing channels were preoccupied with the issues of control and power, i.e. the power-influence approach to leadership (see, for instance, Brown and Frazier, 1978; Etgar, 1976, 1977, 1978; Hunt and Nevin, 1974; Lusch and Brown, 1982). By placing emphasis primarily on the power-influence approach as a means of exercising leadership, researchers have limited conceptual development in the area by not taking into consideration other non-coercive leadership frameworks such as the path-goal theory that may also be applicable to the marketing channels setting (Frazier, 1999). Path-goal theory of leadership Representing one of the popular theories of leadership, the path-goal theory (House, 1971; House and Mitchell, 1974) has fostered tremendous research interest in organizational behavior. Drawn largely from the political sciences and sociology, recently, the path-goal theory has obtained currency in the literature on cross-cultural management with the development of the international contingency model of leadership, which suggests the use of different leadership styles contingent upon divergent cultural settings (Francesco and Gold, 1998; Hofstede and Bond, 1988; Kreitner, 1995; Rodrigues, 1990). The thrust of the path-goal theory is that certain tasks need to be performed if organizationally desirable results are to be attained. In sum, the tasks are the paths; the results are the goals. Through an exchange process that takes place between a leader and his subalterns, this theory espouses that leaders can influence the behavior and performance of group members by employing appropriate leadership styles (Stoner et al., 1995). According to House and Mitchell (1974), participative, supportive, directive, and achievement oriented leadership styles form the key elements of the path-goal theory. However, Barnett and Arnold (1989), who have extended the path-goal theory to the marketing channels context, maintain that only participative, supportive, and directive leadership styles are appropriate for the management of marketing channels. A participative leadership style is one in which an individual is able to influence decision about his or her job to a high degree (Teas, 1982). Participative leaders share a significant degree of decision-making power (Robbins, 1996) with their subordinates. In the marketing channels setting, a participative leader would consult with channel participants, solicit their

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suggestions, and consider these suggestions in making decisions on the design and introduction of channel wide policies and procedures (Schul, 1987; Schul et al., 1985, 1983). A supportive leadership style is one in which the leader creates a facilitative task environment of psychological support, mutual trust and respect, as well as helpfulness and friendliness (Gibson et al., 1988; Daft, 1988). A channel leader exhibiting supportive leadership behaviors would consider other channel participants’ needs, display concern for other channel participants’ accomplishments, look out for their welfare, attempt to establish mutual interest, and build a team climate procedures (Schul, 1987; Schul et al., 1985, 1983). A directive leadership style is one in which the leader provides a high degree of specific direction to subordinate’s work activities by organizing and defining the task environment. The channel leader employing a directive leadership style would, therefore, assign the necessary distribution tasks to be performed, specifying rules, regulations, and procedures to be followed in accomplishing tasks, clarify expectations, schedule work to be done, establish communication networks, and evaluate channel member performance (House, 1971; Gibson et al., 1988). A directive channel leader would also communicate to channel members’ distribution objectives and policies, establish rules and regulations (similar to formalization), and determine operating procedures to be followed in the performance of distribution tasks (Schul, 1987; Schul et al., 1985, 1983). Admittedly, a channel leader may exhibit varying degrees of participative, supportive, and directive leadership styles. Moreover, it is important to note that a channel leader may exhibit all the three behaviors simultaneously, or have a greater propensity for using one style over the other two. The discussion above suggests that participative, supportive, and directive leadership styles are conceptually distinct, independent constructs, but because they can be displayed concomitantly, these behaviors may be empirically inter-related. Cooperation To be successful, channel leaders need to engender cooperation among channel partners, and recent literature in the marketing channels area has focused on the understanding of long-term channel relationships. The issues of trust and commitment have been especially popular lines of inquiry (see, for instance, Anderson and Narus, 1990; Anderson and Weitz, 1992; Heide and John, 1992; Morgan and Hunt, 1994). While there are many forms that channel partnerships may take, including discrete exchanges, market exchanges, and repeated exchanges, and cooperation among channel participants in any type of marketing channel relationship may be sought, the goal may not necessarily always be an integrated, interfirm relationship. So, rather than focus on the issues of trust and commitment as in the relational exchange literature, this study investigates the broader concept of cooperation.

Marketing channels are composed of interdependent institutions that must cooperate to perform distribution tasks in the course of simultaneously pursuing independent and collective goals. In short, functional interdependence requires a substantial level of cooperation to perform the specific tasks necessary to make products and services available to final consumers. Cooperation is defined as a ``state or condition characterized by members’ willingness to coordinate their activities in an effort to help all channel members achieve super-ordinate goals’’ (Stern and Gorman, 1969, p. 156). In essence, cooperation is facilitated in those channels whose members share similar goals. It should also be noted that cooperation and conflict are not opposites that lie on the bi-polar extremes of a continuum as conceptualized by Pearson and Monoky (1976). Rather, while they are highly interrelated, cooperation and conflict are separate, distinguishable processes. Stern and Reve (1980) state that conflict or opponent-centered interference and blocking behavior may impede the accomplishment of mutual goals, but the absence of conflict will not product joint-striving (cooperation) in any form of marketing channel relationship. Indeed, with the increase of literature on strategic alliances and distribution interfirm long-term relationships, the success of which are heavily predicated on the level of cooperation fostered among partners (Contractor and Lorange, 1988), it would seem that cooperation is a logical focus of investigation. Although studies focusing on how cooperation can be engendered are becoming pervasive, none have investigated the use of leadership styles as strategies to heighten the level of cooperation (and ultimately performance) among a firm’s international marketing channel members. However, as noted earlier, the literature on cross-cultural management suggests that the use of leadership styles is largely predicated upon the cultural setting (Francesco and Gold, 1998; Hofstede and Bond, 1988; Kreitner, 1995; Rodrigues, 1990). Culture and leadership styles One important factor in international marketing research is the potential impact of cultural differences on the appropriateness and effectiveness of marketing strategies, which have been widely studied by international business researchers. Some studies on distribution channel relationships have found that differences exist in channel member behaviors in different cultural contexts and, thus, the response elicited from channel members may depend on the cultural context (Frazier et al., 1989; Johnson et al., 1993, 1996). So, it is important to consider culture when investigating channel member behaviors in multiple nations. Despite nearly 40 years of work in the area of comparative management, many different definitions of culture exist (see for instance, Hall, 1959, 1976; Hall and Hall, 1990; Hofstede, 1980, 1984a, 1984b, 1991; Trompenaars and Hampden-Turner, 1998), and there is still much rigorous work to be done on the complex problem of cultures and organizational behavior (Redding, 1994).

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Hofstede performed extensive research on the national character of managers aimed at detecting elements of structure in various cultural systems and the implications of these elements on management. His work has helped conceptualize one of the most popular theories of cultural types, as evidenced by well over 1,000 citations from Culture’s Consequences (Hofstead, 1980) reported in the Social Science Citation Index since 1980, numerous replications of his studies, and the fact that his work has often been used as a paradigm, whereby the dimensions are used as a cultural framework outside their original setting (Sondergaard, 1994). Hofstede initially identified four underlying value dimensions. Since then a fifth dimension has been identified (Hofstede and Bond, 1988), but there has been some evidence that the fifth dimension and the original individualism dimension are not independent and are, in fact, highly correlated (Yeh and Lawrence, 1995). Consequently, only the original four dimensions are discussed. Individualism versus collectivism In individualistic societies, members are concerned about their own interests. Individualistic societies place an emphasis on self-interest. Identity resides within the individual rather than in the groups or organizations to which a person belongs and there is an emphasis on individual achievement. As a result, people strive to achieve an active role where their contributions will be noted and valued. However, they also expect the rules for behavior and rewards for achievement to be clearly stated in advance, so that they may map their path to individual advancement. Collectivist societies are more motivated by group interests, and people expect groups to which they belong to look after them. Belief is placed on group decisions. Further, individual opinions are predetermined by those groups and absolute loyalty is owed to the group or organization (Hofstede, 1980, p. 48). In these types of societies, interdependence among group members to assure the success of the whole is crucial. Strong versus weak uncertainty avoidance Societies with strong uncertainty avoidance feel more threatened by uncertain or ambiguous situations. Thus, they tend to exhibit rigid and formal rules and do not tolerate unusual behavior or ideas. There is also a strong need for consensus, and a great concern with security, as well as higher anxiety and stress. In weak uncertainty avoidance countries, while there are rules, they are considered more a matter of convenience than immutable law, and are more easily changed. There is more of an acceptance of dissent and risk taking (Hofstede, 1980, p. 47). People feel more comfortable offering alternative methods, which may or may not be implemented. Also, a comfortable, friendly environment would be valued over a rigid environment that exacerbates stress.

Large versus small power distance Power distance describes the extent to which a society accepts power being distributed unequally. In large power distance countries, more subordinate dependence is expected and paternalism is the norm. People accept the notion that a level of inequality in the world exists and everyone has a set place within that order. Others are considered threats to one’s power and are rarely trusted. Small power distance societies encourage more participation in decision making from subordinates. People are considered interdependent and inequality is minimized. Latent harmony exists among those in and out of power and as a result, there is more trust in others (Hofstede, 1980, p. 46). Masculinity versus femininity Masculine societies are associated with increased emphasis on materialism, acquisition of wealth, and the lack of concern for quality of life. Performance is of paramount importance. Men are expected to dominate society, and sex roles are clearly defined and differentiated. Feminine societies, on the other hand, emphasize solidarity and concern for others. Sex roles are more flexible and interdependence is the ideal. Service is a prime motivator and people work in order to live (Hofstede, 1980, p. 49). There is a strong emphasis on equity in these types of societies. While these dimensions have been widely used, Sondergaard (1994) identified three major constraints to Hofstede’s work: (1) whether the data collected between 1968 and 1973 were artifacts of that period; (2) whether the research was constrained due to Hofstede’s research population of IBM employees; and (3) whether the use of only attitude-survey questionnaires was a valid base from which to infer values. Despite these concerns, he found that over the years, Hofstede’s dimensions have been largely confirmed, with remarkably few non-confirmations. Thus, Hofstede’s cross-cultural paradigm is used in this study to assess the impact of leadership styles on cooperation, and ultimately channel member performance. Channel member performance Channel member performance can be defined as ``the degree to which the channel member engages in behavior that contributes to the fulfillment of the channel leader’s objectives’’ (Gaski and Nevin, 1985, p. 131). Since channel members can significantly influence a firm’s success or failure in the long-run, organizations are increasingly concerned about the level of performance of the institutions that comprise their marketing channels. Moreover, the level of performance attained by channel members can be pivotal if a firm is to achieve a differential advantage (Porter, 1980, 1985; Rosenbloom, 1999). However, the literature on marketing channels readily reveals that research on marketing channel member performance has been secondary in emphasis and little is known about what

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influences channel members to perform effectively in selling the products of the firms they represent. This may be partly attributed to the absence of a general agreement over the definition of performance (Lambert and Cook, 1979). Terms such as effectiveness and productivity have been used interchangeably, which has made the clear specification of performance difficult. In this study, a managerial view is used to assess the performance of individual channel members. It focuses on measuring the channel efficiency of channel members because the performance of the overall marketing channel is determined to a large extent by the performance of individual channel members comprising the channel. Marketing channel efficiency is measured by two indices: productivity and profitability. Channel productivity refers to the efficiency with which output is generated from resource and inputs used or expended (Stern et al., 1996). Channel productivity is a measure of efficiency in using inputs (measured in terms of labor and capital) to generate outputs (measured in terms of revenues, gross margins, and value added). Channel profitability is a general measure of the financial performance of channel members in terms of return on investment, growth in profits and liquidity leverage, among other indices. In short, channel profitability indicates how efficiently marketing channel members utilize their financial resources and, as observable indices, represent economic success or factors related to it (Rosenbloom, 1999). Research hypotheses Whether leadership styles identified in the path-goal theory of leadership can be used uniformly from one country to the next to manage a firm’s international marketing channels is an empirical issue that needs to be comparatively verified. Consequently, based on discussions offered in the foregoing sections, several research hypotheses are formulated below. Effective channel leadership styles may play a crucial role in enhancing cooperation in a marketing channel. Although no international channel studies have specifically investigated the impact of participative channel leadership styles on increasing the cooperation of channel members, it has been suggested that cooperation is a desirable outcome of this type of channel leadership behavior (English and Arnold, 1987). By consulting with channel members, soliciting their suggestions, and considering their views in making decisions on designing and implementing channel-wide policies, a participative channel leader engenders cooperation. Encouraging channel members to participate in decision making should evoke the perception of being an integral part of the overall distribution channel. English and Arnold (1987) also suggest that a supportive channel leadership style is a determinant of cooperation. A supportive channel leader considers the needs of channel members, displays concern for their well-being, attempts to establish mutual interest and trust, and looks out for their welfare. Therefore, channel members who perceive their channel leader to be supportive of their needs and problems should be motivated to cooperate with one another.

Research suggests that formalization of marketing channel relationships ± indicative of a directive leadership style ± as manifested by the codification of rules, regulations, documents, and procedures for performing tasks, is positively associated with cooperation (Reve, 1980, 1986). Although it is also recognized that excessive emphasis on rules and regulations may stifle cooperation, channel members should be more likely to understand and appreciate channel policies and guidelines instituted by a directive channel leader. Directive leadership should reduce the redundancy and duplication of work effort because channel members know what tasks they are expected to perform, which, in turn, should increase cooperation. Hence, the following hypotheses:

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H1a: A participative leadership style exhibited by the channel leader is associated with a higher level of cooperation, as perceived by channel members. H1b: A supportive leadership style exhibited by the channel leader is associated with a higher level of cooperation, as perceived by channel members. H1c: A directive leadership style exhibited by the channel leader is associated with a higher level of cooperation, as perceived by channel members. As mentioned above, in individualistic societies members are concerned primarily with their self-interest and there is an emphasis on individual achievement. As a result, people strive to achieve an active role where their contributions will be noted and valued. However, they also expect the rules for behavior and rewards for achievement to be clearly stated in advance, so that they may map their path to individual advancement. The manifestation of these characteristics calls for the use of directive leadership styles as suggested in Table 1. However, in collectivist societies members are more motivated by group interests. In these types of societies, interdependence among group members to assure the success of the whole is crucial. Therefore, trusting and personal relationships should be fostered via the use of participative and supportive leadership styles (see Table I). Cultural dimensions Leadership styles

Individualism versus collectivism Indiv. Collect.

Uncertainty avoidance Weak Strong

Power distance Small Large

Masculinity versus femininity Masc. Fem.

Participative

3

3

3

3

Supportive

3

3

3

3

Directive

3

3

3

3

Table I. A contingency paradigm for leadership styles: summary of cultural hypotheses


In societies with strong uncertainty avoidance, members are more threatened by uncertain situations and there is a strong need for consensus. Hence, people in these types of societies feel more comfortable with explicitly stated rules and regulations such as those evident in a directive leadership style (see Table I). However, in societies with weak uncertainty avoidance, there is more acceptance of dissent and risk-taking and people are more comfortable with multiple alternatives that may or may not be implemented. Consequently, weak uncertainty avoidance countries are more consistent with supportive leadership styles that provide a trusting, friendly environment for work, and perhaps to a lesser extent a participatory leadership style that fosters involvement (see Table I). In societies with large power distance, more subordinate dependence and inequality is expected. Consequently, leaders dictate rules and regulations ± a pattern consistent with a directive leadership style (see Table 1). In small power distance societies, inequality is minimized and people are more interdependent. As a result, small power distance countries are more consistent with a participative leadership style where everyone is involved in decision making and a supportive leadership style that seeks to engender trust in the work environment (see Table I). In masculine societies, performance and materialism are very important. Thus, rules and rewards are expected to be clearly defined, which is consistent with a directive leadership style (see Table I). In feminine societies, quality of life, involvement, and solidarity are considered very important. So it seems that these types of societies would be more consistent with a participative leadership style that invites the involvement of everyone in an organization in the decision-making process, and perhaps to a lesser extent, a supportive leadership style that seeks to provide the foundation from which people may succeed (see Table I). In terms of the above four cultural dimensions, the USA is an individualistic society, has a weak uncertainty avoidance, a small power distance, and is a masculine society. What really stands out for the USA, however, is the high individualism score. Repeatedly, the USA has scored as the most individualistic nation that has been measured. While the weak uncertainty avoidance and small power distance scores would lead one toward participatory and supportive leadership styles, the strength of the individualism score, combined with the fact that the USA is more masculine than feminine society, it would be expected that a directive leadership style would engender more cooperation. Therefore, the following hypotheses: H2a: In the USA, the positive association between a directive leadership style and channel member cooperation will be greater than the positive association between a supportive leadership style and channel member cooperation. H2b: In the USA, the positive association between a supportive leadership style and channel member cooperation will be greater than the

positive association between a participative leadership style and channel member cooperation.

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In terms of the four cultural dimensions, Finland falls toward the midpoint of two of the dimensions’ continua. It is individualistic and has a weak uncertainty avoidance, but is not extreme in either. It does have a very small power distance score and is a very feminine society, which suggests that participatory and supportive leadership styles may be more appropriate with the emphasis on the participatory style due to the highly feminine society. Thus, the following hypotheses:

645

H3a: In Finland, the positive association between a participatory leadership style and channel member cooperation will be greater than the positive association between a supportive leadership style and channel member cooperation. H3b: In Finland, the positive association between a supportive leadership style and channel member cooperation will be greater than the positive association between a directive leadership style and channel member cooperation. With respect to the four cultural dimensions, Poland falls in the middle of the individualism, uncertainty avoidance and power distance dimensions, but is toward the individualistic, weak uncertainty avoidance, and small power distance ends of the continua. What stands out for Poland is that it is a very masculine society, thus we would expect that a directive leadership style would be more appropriate in this society for enhancing cooperation. Due to the weak uncertainty avoidance it would be expected that a participatory leadership style should engender more cooperation than a supportive leadership style. Accordingly, the following hypotheses: H4a: In Poland, the positive association between a directive leadership style and channel member cooperation will be greater than the positive association between a participatory leadership style and channel member cooperation. H4b: In Poland, the positive association between a participatory leadership style and channel member cooperation will be greater than the positive association between a supportive leadership style and channel member cooperation. In presenting a general model of channel member behavior, Robicheaux and ElAnsary (1976) assert that functional interdependence inherent in marketing channels requires cooperation in order to accomplish channel-related tasks. Without cooperation, the working relationship and, hence, the system will disintegrate (Michie and Sibley, 1979; Stern, 1971; Stern et al., 1996). It has been postulated that the more cooperative the channel relationship, the greater the profits attainable for the channel as a whole (Mallen, 1964; Stern


and Reve, 1980). The thesis that cooperation is a major determinant of channel member performance has been supported (Brown, 1979; Kelly and Peters, 1977; Pearson and Monoky, 1976). Thus, the following hypothesis: H5: In the USA, Finland, and Poland, higher levels of cooperation among channel members are associated with higher levels of channel member performance. Research methodology The research hypotheses were empirically tested using data drawn from marketing channels for new automobiles in the USA, Finland, and Poland because these countries represent distinctly different cultural and economic orientations[1]. In fact, a cursory examination of the cultural scores assigned to the USA, Finland, and Poland (Brouthers and Brouthers, in press; Hessels, 1996; Hofstede, 1984a, b) indicates that these countries differ significantly with respect to power distance, uncertainty avoidance, masculinity-femininity, and individualism-collectivism. The USA is indicative of a highly competitive, free enterprise culture. Finland represents a competitive culture with a more socialistic bent, which is associated with many western European countries. Poland, which was associated with the former communist bloc for over half a century, may still exhibit a collectivist, totalitarian culture. According to Paliwoda (1997), even though Poland is currently attempting to transition to a capitalistic economy, replacing the old planned economic system may be difficult in a short period of time. The data were gathered from one industry ± automobiles ± to reduce confounding effects which extraneous factors, such as different types of products (consumer and industrial), and different types of channel intermediaries (retailers, wholesalers, distributors and brokers), may have on the linkages specified in the hypotheses. Several other characteristics also justified the use of automobile channels. First, using the same industry facilitates meaningful comparison of the findings. Second, in this industry, transactions among channel participants are usually characterized by longterm 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 such as General Motors 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 collective goals. Therefore, the frequency of interaction between the boundary personnel of the manufacturer and automobile dealership is likely to be high and inter-firm influence attempts are likely to be more evident (Ridgeway, 1962). Fourth, the boundary personnel of the auto dealer’s firm, who are the recipients of inter-firm influence attempts, should be in a good position to shed light on the leadership styles used by the channel captain.

Fifth, because intense competition persists on a global scale, channel participants are likely to cooperate in formulating a coherent international marketing strategy. Finally, the global automobile industry allows a sizable cross-sectional sample to be drawn. The sampling frame consisted of dealerships of new automobiles in the USA, Finland and Poland. In the USA, a national random sample of 1,047 automotive dealerships was generated from the internal databases of a commercial mailing list company. However, as the automotive distribution channels in Finland and Poland consist of institutions that market automobiles produced by foreign manufacturers, the sampling frame consisted of dealerships of new automobiles identified in directories of automobile importers and dealers. Based on these registries, a random sample of 600 vehicle importers in Finland and 75 automobile dealers in Poland was drawn. Survey development, pre-test and data collection procedure A four-page survey was designed to elicit information from principal key respondents, whose perceptions have been known to be reliable and valid (Campbell, 1955; Schwenk, 1985), on channel management practices including demographic characteristics. Interviews with key informants in the automobile dealerships helped assess if the specified domain of the constructs of interest were reflected in the various scales. This procedure helped ensure the content validity of the measures. In the USA, the pre-test of the preliminary questionnaire on a sample of 15 automobile dealers indicated that general managers were the most qualified to provide the requisite data because they were primarily responsible for interacting with the boundary personnel of their principal automobile suppliers. Prior to pre-testing the questionnaire in Finland and Poland, the questionnaire was first translated into Finnish and Polish following the procedures advocated by Brislin (1970), and Werner and Campbell (1970). To maintain equivalence, the surveys were then back-translated into English (Sekaran, 1983), which was then compared to the original to assess conformity. The survey was subsequently pre-tested using a convenience sample of 15 automobile dealers in Finland and Poland. Other than minor editorial changes, no further modifications to the survey were necessary. In the USA and Finland, the survey was administered using a two-step procedure. In the first phase, a packet containing a cover letter, the survey and a pre-addressed, postage-paid reply envelope was mailed to general managers of dealerships for new automobiles. A cover letter explained the purpose of the study, the importance of respondent participation, and the time-frame within which to return the survey. In an effort to obtain a high level of participation, respondents were offered an executive summary of the findings upon completion of the study. Moreover, all were assured that their responses would be kept confidential. The second phase of the data collection process consisted of a follow-up letter, mailed a week later, that reminded participants to complete and return the survey within the pre-specified time period.

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In Poland, the study was not administered by mail because 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, the use of alternative data collection procedures has been advocated (Jain, 1993; Terpstra and Sarathy, 1994). Because these characteristics are manifest in Poland, a data collection procedure that was used in another cross-cultural channel investigation was also employed here (Bandyopadhyay et al., 1994). More specifically, the data were gathered by means of personal interviews conducted by a group of graduate assistants, who hand-delivered the questionnaires to the key respondents in the automotive dealerships who had agreed to participate in the study. In most cases, the respondents completed and returned the survey to the respective graduate assistant, although a few preferred to mail back the survey upon completion. Response rate and assessment of non-response bias In the USA, questionnaires were mailed to general managers representing a random sample of 1,047 dealerships for new automobiles. A total of 188 questionnaires were returned within the specified time, yielding a base response rate of 18.52 per cent. A total of 32 surveys were returned as undeliverable and another 11 questionnaires were considered unusable because of incomplete responses, which were discarded from the study. This yielded a usable response rate of 17.43 per cent. Of the 600 questionnaires that were mailed to general managers of new automobile dealers located in Finland, 101 completed surveys were returned, yielding a usable response rate of 16.83 per cent. Of the 75 general managers of automobile dealers located in a major Polish metropolitan city and its suburbs 60 surveys were returned, yielding a base response rate of 80 per cent. After eliminating eight surveys due to incomplete responses, the usable response rate was 69.33 per cent[2]. Even though the response rates attained in the USA and Finland are similar to those reported in a number of empirical investigations on marketing channels (see, for instance, Bandyopadhyay and Robicheaux, 1997; Gatignon and Robertson, 1989; Heide and John, 1988; Phillips, 1981; Seifert and Ford, 1989), it was necessary to assess non-response bias. First, 25 randomly selected non-respondents were contacted by telephone and asked to respond to several questions regarding general company demographic characteristics ± as advocated by Churchill (1991). T-tests were calculated 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, years of operation, years affiliated with primary auto supplier). No statistically significant differences in these organizational characteristics (p < 0:05) were discerned. A second test for non-response bias examined the differences between early and late respondents on the same set of factors ± as suggested by Armstrong and Overton (1977). This assessment also yielded no significant differences between early and late respondents with regard to annual sales revenues,

number of employees, years of operation, years affiliated with primary auto supplier. In sum, non-response bias does not appear to pose any substantial problems. Measures Leadership styles. These were assessed using self-reported perceptual scales that were originally developed by Schul et al. (1983). Considered to be seminal scales (Bearden et al., 1993; Bruner and Hensel, 1992), they consist of a total of nine perceptual measures of which three items each assess participative, supportive and directive channel leadership styles respectively (see Table II for scales). Key informants in the automobile dealership were asked to rate the channel leader using these nine items on a scale that ranged from ``strongly disagree’’ (1) to ``strongly agree’’ (5). Cooperation. This was measured using a nine-item scale that was originally developed by Childers et al. (1984). Presented in Table III, the response format for these scales ranged from ``definitely disagree’’ (1) to ``definitely agree’’ (6). Leadership styles scales Participative leadership style 1. Our dealership has major influence in the determination of policies and standards for marketing the supplier’s autos 2. Good ideas from our dealership often do not get passed along to the supplier’s headquartersa 3. Our dealership is not allowed to provide input into the determination of standards and promotional allowancesa Supportive leadership style 4. There is definite lack of support, coaching, and feedback from the suppliera 5. Once the supplier sells us their autos they forget all about usa 6. The supplier is highly interested in the welfare of our dealership Directive leadership style 7. The supplier provides us sufficient guidelines and careful instructions on how to manage our dealership 8. The rights and obligations of all parties concerned are clearly spelled out in the license agreement 9. We are encouraged to use uniform procedures Percent of total variation Eigenvalues for participative leadership Eigenvalues for supportive leadership Eigenvalues for directive leadership Note: aScales reversed before factor analysis

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Extracted factor loadings USA Finland Poland

0.8086

0.7394

0.2046

0.4369

0.7052

0.7069

0.7033

0.7822

0.8938

0.8553

0.7618

0.6750

0.5088

0.8545

0.6486

0.5974

0.5060

0.1747

0.6192

0.6841

0.3331

0.7793 0.7979

0.8070 0.5272

0.8567 0.8206

80.6 6.06 0.99 0.89

62.5 3.13 1.48 1.02

69.9 3.83 1.25 1.20

Table II. Factor analysis for leadership styles: varimax rotated matrix


Table III. Factor analysis for cooperation: varimax rotated matrix

Cooperation scales 1. Our future goals are best reached by working with the primary supplier rather than against the primary supplier 2. Our future profits are dependent on maintaining a good working relationship with the primary supplier 3. I don’t think that we can count on the primary supplier to give us the kind of support (such as local advertising) that dealers working with other auto manufacturers receivea 4. I think that if we contribute to improving the dealership’s performance in the future, the primary supplier will take care of us 5. Overall, the future of our relationship with the primary supplier promises to be beneficial to both of us 6. I believe our primary supplier recognizes the effort we put into selling their products and they support us for it 7. I believe that if our primary supplier achieves its competitive goals, we will also be in a better position to compete with other local auto dealerships 8. I think our primary supplier works `àround us’’ more than ``with us’’ in trying to achieve the company’s goalsa 9. We could probably be as successful with several other auto suppliers as we are with our present suppliera Percent of total variation Eigenvalues

Extracted factor loadings USA Finland Poland

0.0580

0.0958

0.8554

0.4938

0.0883

0.8818

0.8776

0.6742

0.8298

0.8673

0.6053

0.6785

0.6016

0.7799

0.8195

0.7194

0.7540

0.3287

0.3470

0.5870

0.8102

0.7711

0.5782

0.6406

0.7911 62.5 5.62

0.6330 38.8 3.49

0.0356 38.9 3.50

Note: aScales reversed before factor analysis

Channel member performance. Although operationally defined and measured in different ways, in this study, channel member performance represents shortterm economic objectives of channel members. Key informants were asked to provide data on sales per employee (an indicator of channel productivity), annual sales, and total net profits (indicators of channel profitability). The Finnish and Polish economic performance data were converted to US dollars using the average exchange rate for the period the data were gathered. Construct validity, reliability, and multicollinearity The psychometric properties of the leadership styles and cooperation measurement scales were analyzed for construct validity for each sample separately (Churchill, 1979; Peter, 1981). With respect to leadership styles, the results of the principal components factor analyses using a varimax, orthogonal rotation are presented in Table II. These findings 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).

The principal components factor analyses for cooperation employed a varimax, orthogonal rotation, which, as reported in Table III, confirms the distinctiveness of these scales as well. In cross-national investigations, Mullen (1995) and Singh (1995) advocate the need to check the coherence in factor structures as well as assess factor equivalence for the different samples. In general, the results obtained show strong evidence of factor similarity due to the emergence of similar factor structures; additionally, factor equivalence appears to be established because there appears to be a general similarity in terms of factor loadings. To assess the internal consistency of the measures, the Cronbach (1951) coefficient alpha reliability estimates that were computed are presented in Tables IV-VI. Since reliabilities of 0.60 to 1.00 are considered to be sufficient (Nunnally, 1978), the measures in this study can be considered reliable. In examining the pairwise intercorrelations among all predictor variables reported in Tables IV-VI, low to moderate levels of multicollinearity are evident. Consequently, as suggested by Draper and Smith (1981) and Hair et al. (1998), the measures for leadership styles and cooperation were Variables 1. 2. 3. 4. 5. 6. 7.

Participative leadershipb Supportive leadershipb Directive leadershipb Cooperationb Sales volume Net profits Sales per employee

Cronbach alpha

1

2

3

4

5

6

7

1.000 0.000 0.000 0.501 0.586 0.629 0.640

0.000 1.000 0.000 0.604 0.211 0.250 0.179

0.000 0.000 1.000 0.260 0.461 0.546 0.426

0.501 0.604 0.260 1.000 0.506 0.616 0.540

0.586 0.211 0.461 0.506 1.000 0.900 0.902

0.629 0.250 0.546 0.616 0.900 1.000 0.853

0.640 0.179 0.426 0.540 0.902 0.853 1.000

0.87

0.87

0.83

0.92

-

-

-

1. 2. 3. 4. 5. 6. 7.


Cronbach alpha

1

2

3

4

5

6

7

1.000 0.000 0.000 0.521 0.158 0.161 0.221

0.000 1.000 0.000 0.390 0.000 0.008 0.005

0.000 0.000 1.000 0.262 ±0.043 ±0.075 ±0.086

0.521 0.390 0.262 1.000 0.132 0.155 0.143

0.158 0.000 ±0.043 0.132 1.000 0.999 0.890

0.161 0.008 ±0.075 0.155 0.999 1.000 0.936

0.221 0.005 ±0.086 0.143 0.890 0.936 1.000

0.65

0.70

0.60

0.80

Notes: a All pairwise correlations > 0:20 significant beyond p < 0:05 b The constructs were represented by their respective factor scores

-

-

-

651

Table IV. Pairwise correlationsa and reliabilities for US sample


Variables

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Table V. Pairwise correlationsa and reliabilities for Finland sample

International Marketing Review 18,6 652 Table VI. Pairwise correlationsa and reliabilities for Poland sample

Variables 1. 2. 3. 4. 5. 6. 7.


Cronbach alpha

1

2

3

4

5

6

7

1.000 0.000 0.000 0.003 0.305 ±0.393 0.357

0.000 1.000 0.000 0.287 ±0.241 ±0.176 ±0.534

0.000 0.000 1.000 ±0.240 ±0.262 0.641 ±0.378

0.003 0.287 ±0.240 1.000 ±0.446 ±0.731 ±0.047

0.305 ±0.241 ±0.262 ±0.446 1.000 0.996 0.618

±0.393 ±0.176 0.641 ±0.731 0.996 1.000 0.591

0.357 ±0.534 ±0.378 ±0.047 0.618 0.591 1.000

0.65

0.76

0.74

0.75

-

-

-


represented by their extracted factor scores, which were used for testing the hypotheses. Results The data were analyzed using three different statistical procedures. First, the data were subjected to a multivariate analysis of variance test (MANOVA) to examine the overall country effect on all the nine scales that measure participative, supportive and directive leadership styles. This analysis yielded a statistically significant finding (Wilks’ lambda F-value ˆ 26:38, p < 0:001). Second, the results of the analysis of variance (ANOVA) indicated that there was a statistically significant difference in the perceived use of participative (F-value ˆ 28:01, p < 0:001), supportive (F-value ˆ 24:114, p < 0:001), and directive leadership styles (F-value ˆ 59:934, p < 0:001) in the USA, Finland and Poland. These findings helped confirm that it may be appropriate to assess the impact of leadership styles on cooperation in each of the countries separately. Consequently, the third statistical procedure consisted of using least squares regression analyses to test the research hypotheses. Regression analyses The results of the multiple regression analysis with cooperation as the criterion variable are provided in Table VII. Separate regression equations were computed for the Finland, Poland, and US samples ± consistent with practices in multi-country empirical investigations (Douglas and Craig, 1983, 1999). An analysis of the findings suggests that participative, supportive, and directive channel leadership styles have a statistically significant positive impact on cooperation in the USA and Finland. Thus, in these countries there is strong empirical support for H1a, H1b, and H1c. In these two countries, a channel leader displaying higher levels of participative, supportive, or directive leadership styles is able to secure higher levels of cooperation among channel members than if these management styles were not exercised. Participative, supportive, and directive leadership styles, the independent variables,

Predictors (leadership)

Standardized beta coefficient

t

F

p

R2

Sample

Criterion

USA

Cooperationa

Participative a Supportivea Directivea

0.5016 0.6041 0.2604

11.7* 14.1* 6.0*

125.1

0.000

0.6845

Finland

Cooperationa


0.5217 0.3907 0.2623

7.2* 5.4* 3.6*

31.5

0.000

0.4938

Poland

Cooperationa


0.0038 0.2874 ±0.2402

0.03 2.15* ±2.02*

3.6

0.04

0.1404

Notes: a These constructs were represented by their respective factor scores *p < 0:05 (two-tailed)

collectively explained 68.45 per cent of the variation (R2 ) in the dependent variable, cooperation, in the USA and 49.38 per cent in Finland. The F-values of 125.1 in the USA and 31.5 in Finland were both statistically significant. In Poland, however, only a supportive leadership style was a statistically significant, positive predictor of cooperation as hypothesized in H1b. A directive leadership style was significantly related to cooperation, but it was an inverse relationship. Additionally, the three independent variables explained only 14.4 per cent of the variance (R 2 ) in the dependent variable, cooperation. Despite the low explanatory power, the F-value of 3.6 indicates that the model was statistically significant at the p < 0:04 level. As posited in hypotheses H2a-b, H3a-b, and H4a-b, this comparative study seeks to explain which leadership styles are more important in predicting the level of cooperation among channel members. Thus, the standardized beta coefficients were compared, as suggested by Dillon et al. (1994), who indicate that the greater its value, the more important the variable. The results of the US sample show that a supportive leadership style is most strongly associated with cooperation, followed by a participative leadership style, whereas a directive leadership style has the weakest positive association with cooperation. Hence, the data show support for H2a, but not H2b. In Finland, a participative leadership style has the strongest positive association with cooperation, followed by a supportive leadership style and a directive leadership style, in that order. Therefore, there is support for H3a and H3b. There is no support in Poland for H4a or H4b. Not only was a directive leadership style not statistically positively related to cooperation in a stronger manner than a participative or a supportive leadership style, it was significantly negatively related to cooperation. Additionally, a participative leadership style was not significantly related to cooperation, and with a beta of 0.003 the relationship was essentially nonexistent. These findings indicate that

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Table VII. Multiple linear regression results for cooperation


Table VIII. Simple linear regression results for channel member performance

currently the relationship between leadership styles and cooperation across cultures is not consistent. The results of the regression analyses testing the effects of cooperation on net profits, sales volume and sales per employee ± the three indices of channel member performance ± are presented in Table VIII. As hypothesized in H4, the findings provide mixed statistical support for a positive association between cooperation and channel member performance. For the USA sample, cooperation explained 25.68 per cent of the variation in sales volume, 38.02 per cent of the variation in net profits, and 29.25 per cent of the variation in sales per employee ± as reflected by their R2 values. Moreover, for each of the channel member performance measures of sales volume, net profits, and sales per employee, the overall model was statistically significant, as indicated by the F-values of 59.1, 104.3, and 70.7 respectively. With regard to the Finnish sample, the findings show that cooperation is not a statistically significant predictor of channel member performance. More specifically, cooperation explained 1.76 per cent of the variation in sales volume, 2.42 per cent of the variation in net profits, and 2.06 per cent of the variation in sales per employee as indicated by their R2 values. Additionally, for each of the channel member performance measures of sales volume, net profits, and sales per employee the overall model was not statistically significant, as the low F-values of 1.5, 1.17, and 1.75 respectively suggest. The results of the Polish sample show that there is an inverse relationship between cooperation and channel member performance. More specifically, the findings are statistically significant for two (sales volume and net profits) of the three performance measures, but in the opposite direction to the one hypothesized. Cooperation explained 19.97 per cent of the variation in sales volume, 53.52 per cent of the variation in net profits, and 0.23 per cent of the variation in sales per employee ± as reflected by their R2 values. As indicated Standardized beta coefficient

t

F

p

R2

Sample

Criterion

Predictors

USA

Sales volume Net profits Sales per employee

Cooperation a Cooperation a Cooperationa

0.5068 0.6166 0.5408

Finland



0.1325 0.1556 0.1438

1.22 1.13 1.32

1.50 0.224 0.0176 1.17 0.286 0.0242 1.75 0.189 0.0206

Poland



±0.4469 ±0.7316 ±0.0477

±2.12* ±3.72* ±0.20

4.49 0.048 0.1997 13.82 0.003 0.5352 0.04 0.841 0.0023

7.68* 59.10 0.000 0.2568 10.21* 104.29 0.000 0.3802 8.41* 70.70 0.000 0.2925

Notes: a These constructs were represented by their respective factor scores *p < 0:05 (two-tailed)

by the F-values of 4.49 and 13.82, the overall model was statistically significant for sales volume and net profits, but not for sales per employee (F-value = 0.41). Discussion As a result of increasing competition and an accelerating rate of change due to technological advances, many firms are discovering the opportunities that are available to them in foreign markets. Despite this trend, relatively few studies have explored cross-cultural issues in marketing channels. Despite the importance of channel member cooperation, research on this construct has been limited. This study applied three leadership styles that are central to the path-goal theory to a channels context in three nations. The use of participative, supportive, and directive leadership behaviors as inter-firm influence strategies to foster strong channel member cooperation was examined in the USA, Finland, and Poland. It should be noted once again that leadership is not an automatic occurrence in marketing channels. That is, that leadership may or may not be exercised and the channel may, in essence, operate in a ``rudderless’’ fashion. In the USA and Finland, the results of this investigation demonstrate support for the proposition that leadership does have a significant and positive effect on cooperation. Specifically, a participative leadership style, a supportive leadership style, and a directive leadership style are significantly and positively associated with channel member cooperation. Therefore, as interfirm influence strategies, in the USA and Finland these styles engender a collaborative effort and the findings suggest that these concepts are well-suited for developing effective channel management strategies to secure the cooperation of channel members. The lack of support found in Poland may have to do with the transitional nature of the Polish business environment and the development of the marketing channel structure. Channel structure is the set of institutions that perform the distribution functions necessary to make products and services available between producers and final users. In an advanced and mature economy, channel structures are often consciously designed and managed on the basis of specialization/division of labor to reflect a rational allocation of the distribution functions that must be performed to those institutions most capable of performing them effectively and efficiently. Such planned and managed channel structures are indicative of the western industrialized cultures in the USA and Europe. Business format franchising systems where virtually every minute detail of distribution structure is planned and then incorporated into legally binding contracts between franchisor and franchisee are the quintessential example of planned distribution channel structures. In less developed and emerging economies, distribution channel structures are seldom consciously planned and managed. Rather, they are much more likely to have evolved, often haphazardly, and reflect, in many cases, historical accidents rather than a rational allocation of distribution functions among

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institutions that are most suitable for performing them. The short time for the development of effective marketing channel structures, institutions, and management in Poland (only about a decade) may have had an impact on our findings. Additionally, people may take more time to change as well. Cultures resist change and it may take more time for individuals in Poland to adjust their attitudes and behavior that were shaped under the previous system. For example, in Poland, a directive leadership style was associated with a decrease in cooperation. It may be that after living under a communist system for so long people simply react negatively to an autocratic leadership style. Also, there was virtually no association between a participative leadership style and cooperation. Once again, it could be that this is a reaction to the previous system of `ènforced’’ participation. In addition, these findings seem to undermine Hofstede’s assumptions on collectivist cultures where a positive relationship between participative leadership and cooperation would be expected. In the USA and in Finland there was support, using Hofstede’s cultural dimensions, for the notion that cultural context may affect the response of channel members to different types of leadership styles. The USA is a very individualistic country, a culture in which people strive to achieve an active role where their contributions will be noted and valued. It was initially thought that a directive leadership style would foster increased cooperation in this type of a society. But viewed in another way, the results do make sense. In a very individualistic society, people may bristle under a very rule-oriented leadership style. Meanwhile, a supportive leadership style where the leader provides a foundation that the channel member can build upon and ``gets out of the way’’ to let the channel member carry out its responsibilities would be particularly effective. A participative style that allows everyone a voice would also be consistent with an individualistic society. Finland is a more collectivist society than the USA. Thus, it seems reasonable that individuals in a collectivist culture would expect that everyone in the group would ``pitch in’’ as is indicative of the participative leadership style. As noted above, in Poland, while a supportive leadership style engendered cooperation, such cooperation was actually reduced under a directive leadership style. This may be related to the transition from the previous environment, which, despite the surface appearance of participation, was an extreme form of a directive leadership style where disagreement was not permitted. Polish employees may be reacting negatively to the directive leadership style that is closest to the era that recently ended. The relationship between cooperation and performance was mixed. Regardless of how many times and by whom practitioners are exhorted to stimulate cooperation in the marketing channels, if that cooperation is not related to increased performance, those practitioners are not likely to be interested in spending management time and money fostering cooperation. In

this study, it was found that cooperation is positively and significantly related to performance in the USA. In Finland the relationship is positive but not significant, and in Poland the relationship between cooperation and performance is negative and significant. It may be that this is a function of the degree of development of the marketing channel. US marketing channels are commonly regarded as the most efficient in the world and channel members have a track record of success in their ability to add value and perform marketing functions. Thus, they may be more willing to explore and exploit both technological and behavioral changes that foster increased cooperation, which then leads to enhanced performance. Eastern European countries, on the other hand, are still in the process of transforming their marketing and behavioral environments. While on the surface it may seem that a society emerging from communism would respond more positively to a new less integrated, more independent structure, the situation may be more complicated than it first appears. That is, it may be that after years of forced collectivism, any cooperative system may be reminiscent of the previous command economic structure and therefore may provoke negative responses that actually hinder performance. Thus, it may be that cooperation leads to increased performance in marketing channel systems only as the marketing system achieves a certain level of development and maturity. Conclusions and managerial implications This study investigated the general topic of the transferability of management practices across cultures in a marketing channels context. Specifically, the study comparatively examined leadership styles, cooperation, and channel member performance across three divergent national cultures, the USA, Finland, and Poland. The results of this study lead to the following managerial implications: Leadership in international marketing channels is needed regardless of the culture of a particular country. Adaptation of leadership style to reflect cultural differences is necessary to manage (gain cooperation) in international marketing channels. Existing marketing channel structures and changes occurring (in particular, Poland) may affect channel member responses to leadership styles. Historical background as it relates to cultural transformation is part of the cultural milieu of a particular country. Therefore, it is likely to influence behavior in channels of distribution in the countries in question. Building cooperation in international marketing channels may take considerable time in some countries because old attitudes and behaviors need to be shed before new ones that promote, rather then inhibit, cooperation can emerge.

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Limitations of the study This study makes a contribution to the literature by demonstrating that while leadership styles can be used for fostering cooperation among international channel participants, channel leaders need to take into consideration the cultural setting and culture-specific behaviors of channel members. More specifically, leadership styles cannot be uniformly applied. Its findings should be viewed in light of some limitations. The first potential drawback of this study pertains to the sample from which the data were drawn. While marketing channels comprise different types of distributive institutions, data were only sought from automobile dealerships, which are not representative of different types of distribution channel members. Consequently, these findings are not generalizable to other kinds of retailers, wholesalers, distributors and brokers. Furthermore, the findings of a study conducted in consumer goods distribution channels may not be generalized to industrial goods distribution channels. Second, the results may be confounded because no attempt was made to assess the effects of divergent organizational cultures within the national samples. Third, possible bias in respondents’ perceptions may result from using graduate students for collecting the data. Fourth, the variance in the response rates that were obtained in the study may also largely be attributed to differences in the data collection methods (mail in USA and Finland, and surveys administered by graduate students in Poland). Therefore, inferences should be made with caution. Directions for future research Hopefully, this research will spawn future studies to increase our knowledge of leadership behaviors as well as identify other determinants that can be used to heighten cooperation among channel members on a global basis. Additional comparative research needs to be undertaken in a variety of countries manifesting different cultural elements and value dimensions to test further the paradigm presented here against the benchmark results obtained in this initial investigation. First, samples should be drawn from other types of distributive institutions such as wholesalers and retailers. Second, future research should assess if the leadership-performance linkage is mediated by cooperation or is direct. Third, studies should investigate if the leadership-performance relationship is culture bound. Fourth, future investigations should examine whether the relationships between leadership style and cooperation and, in turn, channel member performance remain stable or fluctuate as market structures in countries develop over time. Because research on leadership in international distribution channels can still be characterized as largely embryonic, this area offers substantial opportunity for scholarly contributions. Notes 1. The authors sought to test the hypotheses using data drawn from divergent environments. Yet, while the USA, Finland, and Poland have different cultural and economic orientations, they are, to different degrees, still ``Western capitalist’’ nations. Additionally, channel

management practices in these countries were examined due to the institutional location of the authors. 2. The high response rate attained in Poland obviated the need to assess non-response bias. This high participation rate could well be attributed the use of graduate students in the data collection process.

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