The Impact of Cultural Variables on the Performance of U.S. Overseas Managers and on Performance Measurement Criteria: an Exploratory Study

Abstract

The study is related to the perceived impact of selected cultural variables on the performance of U.S. executives working overseas. Consideration given to these variables for the measurement of performance at the corporate headquarters was also researched in the course of the study. For the purpose of this study, twelve foreign cultural variables were chosen. The general perception of these variables and their perceived impact on the eight specific aspects of performance among the U.S. overseas managers was examined. An attempt has also been to made to ascertain the general perception of these cultural variables among evaluators and the consideration they assign to their perceived effect on the specific aspects of managerial performance in their evaluation of overseas managers. Five regions were chosen for the study on the basis of their being representative of distinct cultural clusters: Far East (more populous than some of the other regions with strong family ties and leanings toward collectivism) , Middle East (religion oriented), Africa (tribal), Europe (industrially advanced) and South America (developing countries). Data were obtained from all the five regions. In all 127 responses were received from the U.S. overseas managers. A total of eighteen responses were received from the evaluators for these five regions. Statistical tests were undertaken to explore the similarities and differences in perception of the twelve selected foreign cultural factors, their perceived effect on the eight specific aspects of managerial performance within and between the five selected regions, and between U.S. overseas managers and their evaluators. Statistically significant differences were identified in the mean responses from U.S. overseas managers regarding their general perception of the cultural factors and their perceived effect on specific aspects of performance within and between regions. However, the differences in the effects of a cultural factor on the selected eight aspects of managerial performance were not statistically significant at a global level although among regions these differences were statistically significant. From a global (aggregate) perspective, the tests failed to identify any statistically significant difference between evaluators' and managers' general perceptions of cultural factors and their perceived effects on the selected aspects of managerial performance. Within African, European and Latin American regions there are some statistically significant differences between managers and evaluators pertaining to a few of the cultural factors. The study has attempted to identify those cultural variables which have differential perceived and considered impact on various aspects of performance. The differential impact of these variables on performance measurement on a regional basis was also studied. Step wise discriminant analysis was employed to identify those cultural variables whose general perception and the perceived effect on the specific aspects of managerial performance would distinctly identify the region. This study by exploring the differences in perceptions of the twelve selected cultural factors and their perceived and considered effect on the specific aspects of managerial performance among managers and evaluators, it is submitted, has helped create a new perspective on measurement, analysis and evaluation of managerial performance on a more comprehensive basis. After measuring the compatibility of managers' perceptions for cultural elements and the consideration accorded to these in the evaluation process at corporate headquarters, and concluding that no statistically significant differences exist at a global (aggregate) level suggestions for future can be made. It is submitted that any differences, if remaining, between managers' and evaluators' perception of performance, can only be due to other factors which merit further investigation in future research endeavours. Multivariate discriminant analysis was employed to identify whether their exists statistically significant differences across various regions. The computed Wilks' lambda and the associated F value rejected the null hypotheses of no differences amongst regions. The stepwise discriminant procedure was used to isolate a subset of twelve variables from the ninety six variables submitted for the test. The selected twelve variables produce a robust discriminant model with a hit ratio of 99% for classification. The study successfully confirmed the existence of significant differences in the perceptions of U.S. overseas managers about the foreign cultural factors and their effects on the specific aspects of their performance. Also, the regions can be effectively differentiated (discriminated} on the basis of U.S. overseas managers' perceptions of cultural factors and their effects on their performance extant there.