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Leadership Style and Employee Involvement During Organizational ChangeJOURNAL OF MANAGEMENT AND CHANGE

No 29 2012

Leadership Style and Employee Involvement

during Organizational Changelle Pihlak, Ruth Alas

Estonian Business School

Professor Ruth Alas, Vice-Rector for Scientific Affairs andHead of the Management Department at Estonian BusinessSchool. Ruth Alas has given lectures on change management inEstonia, China and the Republic of South Africa. Her researchfocuses on the process of change, employee attitudes, learn-

ing abilities, organizational culture, leadership, crisis manage-ment, business ethics and corporate social responsibility. Shehas written twenty-six management textbooks and more than

The aim of the research was to find out how theelements of organizational change depend onthe cultural background of the organizationsmembers. This paper focuses on employeeinvolvement and leadership style during

planned organizational change managementprojects in Indian, Chinese and Estonian orga-nizations. The authors analysed 177 interviewsabout organizational change management con-taining both quantitative and qualitative datain Indian, Chinese and Estonian organiza-tions. This study primarily uses quantitativemethods, and shows that both leadership styleand the level of employee involvement are dif-ferent in these countries. Although the leader-

ship style of the change leader is autocratic inChina and India, and participative in Estonia,employee involvement in decision-making inregard to the content and implementation ofthe change is more frequent in China. Differ-ences in leadership style did not significantlyinfluence employee involvement. Even whenthe leadership style was participative, lowerlevel employees were only involved in deci-sion-making in very few cases. While the level

of employee involvement is positively corre-lated with the success of change in India andEstonia, the study did not show the same cor-relation in China. The article provides guide-lines for managers of multinational companiesand management consultants working with

organizations in India, China and Estonia. Italso proposes further research. Studies of theeffect of culture on change management areincreasingly important due to rapid globaliza-tion.

Keywords: change management, employeeinvolvement, leadership style

Introduction

The three countries India, China and Esto-nia have all experienced the considerablechanges in the business environment at the

beginning of 1990s. Although two of the coun-tries are in Asia, albeit in very different areas,and one in northern Europe, the collapse of theSoviet Union had a substantial influence on allthree countries. The influence was strongestin Estonia which was part of the Soviet Union,and perhaps weakest in China, which still hasmany elements in common with the Soviet era.All of them have welcomed a market economyfor the first time in many years. These radi-

cal changes in the institutional environmenthave urged most organizations to adapt to newchallenges. The institutional environment can

be defined by its culture and structure (Meyeret al., 1994). As the structural institutions inIndia, China and Estonia differ less than the

lle Pihlak, lecturer and manager of the EntrepreneurshipCenter at Estonian Business School. lle Pihlak has been amanagement consultant since 1991, member of the EstonianConsultants Association. She has a master degree in physicsand mathematics, and in business administration. Currently

she is a doctoral candidate at Estonian Business School. Mainduties: boosting entrepreneurship among students, counsellingstudent enterprises; lecturing the following subjects: Intro-

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lle Pihlak, Ruth Alas JOURNAL OF MANAGEMENT AND CHANGE

No 29 2012

cultural institutions, the authors focus primar-ily on the influence of the cultural context fororganizational change management projects inthis article.

Researchers from Estonian Business Schoolcarried out a relatively large survey in India,China and Estonia between 2004 and 2011.The research task was to find out how ele-ments of organizational change depend onthe cultural background of organizationalmembers. The data from Chinese and Esto-nian samples have been used in articles before(Alas and Sun, 2009; Andreeva et al., 2008),

but this is the f irst time India has been addedto the comparison, and the data has been ana-lysed using qualitative methods.

This article concentrates on employee involve-ment and on leadership style during plannedorganizational change projects. The researchquestion was stated as follows: Is the leader-ship style of the change leader and the level ofemployee involvement different in the cultures

of India, China and Estonia? If yes, then howdo these differences influence the success ofthe change projects?

We start with an overview of theoretical state-ments about change management relevant tothe scope of the current article followed byan overview of recent changes in the busi-ness environment in India, China and Estonia.Then we present our research strategy, includ-

ing characteristics of the sample. Followingthat we present our research findings and con-clude the paper with discussions and sugges-tions for further research.

Theoretical Background

Institutional Context of Change

According to the institutionalist perspec-tive, organizations are socially embedded ina particular society (Geppert, 2003). Institu-

(Meyer et al., 1994). Schneider has declaredthat the attributes of an institution depend onthe attributes of its members, including theirvalues (Schneider, 1987). As these values

differ in different cultures, then the attributesof institutions must also differ across differentcultures. At the same time, new institutionaltheorists, DiMaggio and Powell, argue thatorganizations tend to accept similar ways ofdoing business because they want to appearlegitimate to investors, customers, and otherswho influence their success. They believe thatorganizations are open systems and becomeharmonized with their environments through

several exchanges, and that over time theseinstitutional influences create a significantdegree of similarities in structures and cul-tures across organizations in different coun-tries (DiMaggio and Powell, 1983).

This article focuses primarily on the inf luenceof the cultural environment of organizationalchange projects. There are more than 150 defi-nitions of culture (Howard and Howars, 1998).

Jaques has defined culture as the customaryand traditional way of thinking and of doingthings, which is shared by most of its mem-

bers (Jaques, 1989). Hofstede saw culture asthe collective programming of the mind whichdistinguishes the members of one group of

people from another (Hofstede, 1991). Houseet al. defined culture as the shared motives,values, beliefs, identities and interpretationsof significant events (House et al., 2004). All

these definitions imply that the managementpractices in different cultures must be differ-ent.

National cultures are most prominently stud-ied by groups of researchers led by GeertHofstede and by Robert House. The authorsuse the study by Hofstede to compare thecultural differences of India, China and Esto-nia because the indices of different cultural

dimensions for all these countries are foundin the second edition of the book CulturesConsequences. Comparing Values, Behav-

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ership style and employee involvement aremainly influenced by two indices: the powerdistance index (PDI) and masculinity index(MAS). The data is given in Table 1.

Hofstede looks at the power distance that is

accepted by both managers and subordinatesand is supported by their social environmentand is determined by their national culture. Inthe cultures with high PDI, hierarchies reflectexistential inequality and employees expectto be told what to do (Hofstede, 2001). BothChina and India have high PDI. The majorsource of high PDI in India is believed to bethe existence of the caste system (Chhokar etal., 2008) and in China, the Confucian traits

(Noronha, 2002). In India, it is common thatsubordinates show reverence and respecttoward superiors and in return, they expect

protection and support (Sinha and Kanungo,1997; Cappelli et al., 2010). Both in India andChina, the manager is seen as a parent of a

big family who should take care of everything(Sun, 2009; Cappelli et al., 2010). EstonianPDI is considerably lower than Indian and Chi-nese. That means we can expect less employee

involvement and an autocratic leadership styleduring change projects in India and China,while in Estonian organizations employeeinvolvement should be more frequent and theleadership style rather participative.

According to the masculinity index, India andChina are both much more masculine societ-ies than Estonia. That means that Indian andChinese employees see managers as cultural

heroes, expect them to be decisive and firmwhile Estonians stress equality and believethat managers are employees like others (Hof-

leadership style must be autocratic in Chinaand India, and participative in Estonia.

Many authors agree that it is impossible toexplain what is happening in organizationswithout understanding the cultural back-

ground of the members of organizations (Alasand Vadi, 2004; Chatterjee et al., 2006; Erezand Early, 1993; Gopalan and Stahl, 2006;Kennedy, 2001; Lynton, 2001; Jaques, 1989;Sinha, 2004). But as studies show, the culturesalways also influence each other (Avgerou,2001; Van Maanen and Laurent, 1993), andthat organizational cultures are also influ-enced by universally applicable managementcultures besides the national culture (Sinha,

2004).

Different Models of Change Manage-ment

In this article an organization has been definedas a complex system that produces outputs inthe context of an environment, an available setof resources, and a history (Nadler and Tush-

man, 1989), and the term change will referto planned responses to pressures and forcesfrom the environment or inside the organiza-tion (Alas and Sun, 2009).

Many researchers have developed differ-ent models of change management startingwith Kurt Lewins three-stage model (Lewin,1951). Understanding the complexity of thechange management process, researchers have

tried to split Lewins stages to guide changeleaders through difficult change manage-ment projects. Recently, some authors have

Table 1: Scales and Index Scores on a Survey of Social Attitudes

Index Meaning India China Estonia

Power Distance(PDI)

The extent to which the less powerfulmembers of institutions accept and expectthat power is distributed unequally.

77 80 40

Masculinity (MAS)The degree to which a culture programs itsmembers to accept gender inequality.

56 66 30

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scriptions on how best to manage change andaccuse the researchers for over-simplifying thecomplex process (Dawson, 2003; Desai andSahu, 2008; Anderson and Ackerman-Ander-

son, 2001). The authors of this article want tocontribute to the development of change man-agement models by taking into account thecultural context of the country.

The Leadership Style and EmployeeInvolvement

In this study, the change leader is defined as

a person who is responsible for implementingchanges in an organization. Respondents wereasked about the dominant leadership styleduring the change management project. KurtLewin defined three major leadership styles autocratic, participative and delegative (Lewinet al., 1939). In the autocratic style, the leadertakes decisions without consulting with theemployees. In the participative style, the leaderinvolves employees in the decision-making. In

the delegative style, the employees are allowedto make decisions, although the leader maystill be responsible for the outcome. Burnsand Bass used the terms transformational andtransactional leadership style (Bass, 1985;Burns, 1978). The transformational leaderinspires followers to work towards a commongoal while the followers of the transactionalleader are motivated by rewards and punish-ment. Likert identified four leadership styles

exploitative authoritative, benevolent author-itative, consultative and participative (Likert,1967). Leaders using the exploitive authorita-tive style use mainly fear-based methods andhave no concern for people. Leaders using the

benevolent authoritative style also use rewardsbut all major decisions are still made by theleader. In the consultative style, decisions arestill made by the leader but the leader listensto the ideas of followers. In the participative

style, followers are involved in the decision-making process.

cratic, 2 in the middle of autocratic andparticipative. The authors believe that theautocratic style covers the transactional styleas well as Likerts authoritative styles, and the

participative style covers the transformationalstyle. The style between these two may be seenlike Likerts consultative style. The authors ofthis article excluded the delegative style fromthe questionnaire because leaders cannot del-egate the leadership of change (Nadler, 1997).

The leadership style adopted by the changeleader plays a big role during change imple-mentation projects. The culture and mana-

gerial beliefs and practices of the leader aredirectly related, and the cultural values oforganizations influence many aspects in orga-nizations, including the expectations of leader-ship style (Mahler, 1997; Head and Sorensen,2005; George, 2003; Early and Erez, 1997).

According to the leaders leadership style,changes can be viewed as management drivenor participatory. Management driven changes

are planned and implemented by managersalone; in participatory changes, the powerand responsibilities are shared between theemployees and the management (Bruce andWyman, 1998). During participatory changes,employee involvement can be in the form ofinformation sharing or involvement in deci-sion-making. Information sharing increasesmanagement control (Teicher, 1992), whileinvolvement in decision-making presupposes

that managers trust their employees (Brownand Cregan, 2008).

Researchers see employee involvement indecision-making as a critical factor in mitigat-ing resistance and successful change, and asthe best method for achieving employee com-mitment to change (Judson, 1991; Cameron etal., 1993; Coch and French, 1948; Dean et al.,1998; Kirkpatrick, 1985; Pasmore and Fagans,

1992; Pendlebury et al., 1998; Porras andHoffer, 1986).

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sword (Kumar and Amburgey, 2007). Somedeclare that the greater the magnitude of thechange, the more leader-directed activitieswill be required (Hersey and Blanchard, 1997)

or that employees should not be involvedduring the crises when quick changes are to beimplemented (Kotter et al., 1986). One draw-

back of employee involvement seems to bethe fact that this is enormously time consum-ing (Kotter and Schlesinger, 1979). Employeeinvolvement in decision-making means thatmanagers need to relinquish some control overthe company while remaining responsible forthe outcome (Brown and Cregan, 2008).

As there is no clear agreement among research-ers about the benefits of the participative styleduring change projects, but the authors of thisarticle assume that the possibility of involvingemployees and the benefits of such involve-ment differ in different countries. Severalresearchers have found that the effectivenessof employee involvement in decision-mak-ing is influenced by the employees attitude

toward involvement and that employees differin the amount of participatory effort they areprepared to expend (Knocke, 1991; Brown andCregan, 2008; Savery and Soutar, 1991). Theeffectiveness of employee involvement may beinfluenced by local culture and traditions. Itis well known that Indians traditionally acceptauthority and value respect for superiors(Budhwar, 2009b). Subordinates rely on theirsuperiors for advice and direction. The strong

influence of social relations, caste and reli-gion is still observable in Indian organizations(Sparrow and Budhwar, 1997). In China thechange leader is also mainly a top-managerwho informs the employees of the necessityof change and does not motivate employees to

participate (Sun, 2009), or is involved as a formof manipulation and just receive orders fromthe top (Sun and Alas, 2007). This is accepted

by the employees because Chinese employees

are afraid of making mistakes that can reducetheir status (Alas and Vadi, 2004). Also somestudies in postsocialist countries have shown

invitations as a sign of the managements lossof orientation (Piske, 2002).

As the triangular model of dealing with orga-

nizational change (Alas, 2007) shows, thesuccess of change depends on the process ofchange, type of change and the readiness forchange. We suggest that the part of the processof change, among other factors, that deter-mines the level of employee involvement isleadership style.

National Culture and Recent Institu-

tional Changes in India, China andEstonia

As institutional theory suggests that the suc-cess of change is influenced by the institu-tional environment of the organization, thecultural background and recent changes inthe Indian, Chinese and Estonian institutionalenvironment are briefly presented.

India has the longest history of the unbro-ken continuity of its culture, traditions andethos. Seventy-five per cent (75%) of Indiansfollow Hinduism (Chhokar et al., 2008). Thescale for beliefs in Hinduism can be sum-marized as belief in the law of karma, beliefin the atma or soul, and belief in the muktior liberation (Mulla and Krishnan, 2006).Management practices in India are mostlyinfluenced by the belief in the law of karma,

which includes the ideas of responsibility andobedience (Mulla and Krishnan, 2007). Thenature of Hinduism has always emphasizedrespect for superiors, evidenced by the casteand social system (Sahay and Walsham, 1997).In 1990, Sinha identified five common valuesin India: belonging to some group, harmonyand tolerance, duty in contrast to hedonism, a

preference for personalized relationships anda preference for arranging persons, objects,

ideas and relationships hierarchically (Sinha,1990).

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strongly influences management practices(Virmani, 2007) despite Western influencesand Western management theories that aretaught in Indian business schools. After regain-

ing its independence in 1947, India adopted asocialist socio-economic policy (Mellahi andGuermat, 2006). Inspired by Soviet-style eco-nomic theory and practices, the Indian govern-ment nationalized entire industry groups andall banks (Cappelli et al., 2010). In 1991, Indiaannounced the New Industrial Policy and theIndian government initiated a number of mea-sures to deregulate the economy. This resultedin increased openness to international trade

and capital inflows (Mellahi and Guermat,2006). As a result, Indian firms came undertremendous pressure to change the existingtechnology and organizational culture, toremove surplus labour and to improve quality(Budhwar, 2009b). Today India is consideredone of the strongest emerging markets (next toChina). However, India still has a long way togo before it can compete fully on the worldsmarket (Budhwar, 2009b).

Chineseculture and ethos come mainly fromthe writings of Confucius, Lao Tzu and SunTzu. Confucius defined rules for relation-ships that were all strictly hierarchical. Con-fucian philosophy prevails in Chinese culture(Graham and Lam, 2004). Chinese statecrafthas always aimed for order, harmony andhierarchy (Khanna, 2007). In the first half ofthe 20th century, the Japanese invasion, the

Second World War and the Chinese Civil Warcaused a chaotic situation in China that culmi-nated in the collapse of the countrys military,social and economic systems (Foy and Mad-dison, 1999). Two years after India regainedits independence, in 1949, the Chinese Com-munist Party proclaimed the Peoples Repub-lic of China. During the years between 1949and 1978, China copied Soviet practices justlike India did. The reforms started in China

a decade before they started in India and inEstonia. In the 1980s, reforms began aimedat converting the economy from a command

the WTO. This presented a new stage in thereforms and an opening up to the outside world(Chow, 2000). The reforms in state-ownedenterprises and in the banking and financial

sector, and the globalization of the Chineseeconomy are on-going (Sun, 2009).

Estonians have lived along the Baltic Seafor over 5000 years. Estonia has been a bat-tleground for centuries where the Germans,Danish, Russians, Swedish and Polish ruledEstonia. All these rulers have left their inheri-tance in the Estonian psyche and ethos. From1919 to 1940 Estonia was an independent state

with democracy and a free market economy.The Soviet occupation in 1940 was followedby a restructuring of institutions according tothe principles of the occupant country (Taage-

pera, 1993). Radical reforms commenced inEstonia in 1987/8, when a group of theoreti-cians and practitioners debated the idea of eco-nomic autonomy for Estonia (Taaler, 1995). In1990, the strategic aim of economic autonomywas replaced by the status of an independent

state and the restoration of a market economy(ibid.). Independence was achieved in 1991.After that the Estonian economy was devel-oped according to Freedmans concept of lib-eral market economy (Laar, 2001). In 2004,Estonia became a full member of the Euro-

pean Union. Today, Estonia is the most suc-cessful country among former members of theSoviet Union. In January 2011, Estonia joinedthe euro zone, being the first former republic

of the Soviet Union to join that institution.

Although all three countries face similarchanges in the institutional environment, thespeed of changes in each case has varied.Economic reforms in China and India have

been implemented gradually (Cappelli et al.,2010; Chatterjee and Heuer, 2006; Lin et al.,1996; Sun and Alas, 2009), while in Estoniathe reforms were implemented quickly (Hoag

and Kasoff, 1999). But it is mainly the culturalelement of the institutional environment thatinfluences the relationship between manag-

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more similar to the Chinese than to the Esto-nian culture in the case of power distance andmasculinity.

Propositions

The authors present the following propositionsand the basis for formulating them, which are

based on the literature review:

In light of the power distance index (PDI) theauthors expect less employee involvement andan autocratic leadership style during change

projects in India and China, while in Estonianorganizations employee involvement shouldbe more frequent and the leadership style moreparticipative.

P1: In the process of change implementationin Indian and Chinese organizations the lead-ership style of the change leader is autocraticand the level of employee involvement is low.In Estonian organizations the leadership style

is participative and the level of employeeinvolvement is higher than in India and China.

Many studies have shown that a participativeleadership style gives better results. There areother authors who argue that the greater themagnitude of change, the more leader-directedactivities will be required and less followerdirected activities are permitted (Hersey andBlanchard 1997). As there is no clear agree-

ment among researchers about the benefits ofemployee involvement during change proj-ects, the authors of this article assume that theopportunity to involve employees and the ben-efits of such involvement is influenced by thelocal culture and traditions.

P2: Change projects in Estonia are more suc-cessful when employees are involved in thedecision-making, but employee involvement

has a negative effect in China and India.Leadership style plays a big role during theimplementation of change projects. While

ity of the participative style may depend on thecultural values of the organizations members.In light of this, the authors formulate proposi-tion 3.

P3: The participative leadership styles givesdifferent results in India, China and Estonia.

Methodology of the Research

The authors used the interview questionnaireworked out by Tatiana Andreeva (Andreeva,2006; Andreeva et al., 2008). In order to con-duct the research, 177 interviews were car-

ried out in Estonia (n=63), China (n=55) andIndia (n=59). The respondents were chosenusing the authors professional networks. Therespondents were top managers and manage-ment consultants who had been involved inthe development and implementation of largechange projects. In India the questionnaireand the interviews were conducted in Eng-lish because all the respondents were fluentin English. In China the data was gathered

using Mandarin and in Estonia, the Estonianlanguage was used. All respondents wereasked to reflect on one specific case of orga-nizational change they had participated in in aspecific company.

Cross-sectional research design can includegathering both qualitative and quantitativedata. It also makes it possible to seek out

possible causal associations between vari-

ables (Matthews and Ross, 2010). During theinterviews both qualitative and quantitativedata was collected. However, in this article,the results of the analysis of the quantitativedata are presented. In the quantitative analysisan ANOVA and t-test were completed, linearregression analyses and correlation analyseswere also used to discover the structure of theconnections.

The results of the Study

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background of organizational members, theleadership style and the level of employeeinvolvement during change management proj-ects in India, China and Estonia were studied.

The correlation between leadership style andemployee involvement was then analysed.The authors subsequently analysed how thesuccess of the change management projectsdepended on the leadership style and the levelof employee involvement.

Leadership Style

On a scale describing leadership style of 1to 3, where 1 is participative and 3 is auto-cratic, change leaders in Chinese organiza-tions mostly used the autocratic style (mean2.710, standard deviation 0.460). Change lead-ers in Estonian organizations, by contrast,mostly used the participative style (mean 1.57,standard deviation 0.563). Change leaders inIndian organizations used a style that wascloser to autocratic than participative (mean

2.440, standard deviation 0.601) based on themean value. Nevertheless, the autocratic stylewas used more often in India (mode 3). Theskewness of the results also indicated that theleadership style in India and China tend to bemore autocratic and in Estonia more participa-

tive. While in China there were no cases andin India only one case where the participa-tive style was used, in Estonia there was onlyone case where the autocratic style was used.

Therefore, we cannot analyse the influenceof the participative style on other elementsof change management in China and India.In addition, we cannot analyse the influenceof the autocratic style on other change man-agement elements in Estonia. But the resultscorrespond to the power distance and mascu-linity indices of Hofstedes study (Hofstede,2001), and therefore, the authors believe thatthe selected samples satisfactorily represent

the organizations in these three countries.According the t-test the leadership style inall three countries was different. The corre-sponding statistical coefficients are presentedin Appendix 3. Figure 1 illustrates the dif-ferences in the leadership style of the changeleader in India, China and Estonia.

Employee Involvement

The respondents were asked whether thechange leader involved any employees in deci-sion-making about the content of the change

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or the implementation of the change (Table 2).There was a clear correlation between involv-ing employees in decision-making about thecontent and the implementation of the changein all three countries with a significance levelof 95%. The correlation coefficients are pre-sented in Appendix 4. This means that if,

for example, key specialists were involvedin decision-making about the content of thechange, often the same group was involved indecision-making about the implementation ofthe change.

In all three countries, in more than half ofthe cases the change leader did not involveanybody or only involved top managers indecision-making about the content and imple-mentation of the change. But the involvement

pattern was different in Estonia compared tothe two Asian countries. In Estonia, lower

level employees were more often involvedin making decisions about the content of thechange than about the implementation of thechange (Table 2). In all three countries it wasremarkable that even when culture and valueswere among the elements that were planned as

Table 2: Employee involvement in decision making about content of change and about change implemen-tation (% of companies). Drafted by author.

India China EstoniaInvolved

in deci-sion makingabout ...

content ofchange implement-tation of change content ofchange implement-tationof change content ofchange implement-tationof change

Nobody oronly top

managementteam wasinvolved

63% 64% 51% 52% 49% 64%

Key special-ists

22% 13% 11% 11% 32% 20%

Middle man-agers

13% 18% 25% 24% 8% 11%

Ordinaryemployees

2% 5% 13% 13% 11% 5%

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part of the change, ordinary employees werenot involved in the decision-making process.

Influence of Leadership Style onEmployee Involvement

To evaluate the influence of leadership styleon employee involvement, an ANOVA testwas used (Appendix 5). The hypothesis H0was There are no differences among themeans of the level of employee involvement inthe groups where the leadership style is differ-ent. At a significance level of 95%, the null

hypothesis was rejected only in the case ofChina.In China, when the leadership style was auto-cratic, more often nobody or only top manag-ers were involved in decision-making by thechange leader. In the case of medium levelsof authority, ordinary employees were moreoften involved. Middle managers and key spe-cialists were involved almost equally in bothcases. There were no cases in China where the

leadership style was participative. The influ-ence of leadership style and employee involve-ment on decision-making in China is shownin Figure 2.

In India and in Estonia, the differences inemployee involvement in decision-makingwere not significant in the groups with dif-

ferent leadership styles. In the case of thesecountries, the most interesting finding wasthat even if the interviewee declared that theleadership style was participative, the change

leader most often involved only top managersin the decision-making process. The authorstherefore speculate that the participative styledoes not necessarily mean the involvement ofemployees in the decision-making process inthese countries.

Leadership Style and the Success ofChange Management Projects

The respondents were asked to evaluate on ascale of 0% to 100% the results of organiza-tional change from the point of view of theachievement of the goals set for the change

program by the change leader (from here onreferred to as success rate). It turned out thatthe described changes were most successful inEstonia and least successful in India, wherethe mean was 7521% and 6317% respec-

tively. In China the mean of the success ratewas 6718%.

In India, the ANOVA test showed the differ-ence between the success rates under differentleadership styles at a significance level of 90%(Appendix 6). The correlation coefficient wassignificant at the significance level of 95%

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and negative; this means that where a moder-ate concentration of authority was used by thechange leader, the success rate was higher.

The ANOVA test in China and Estonia didnot show the significant differences betweenthe success rates under different leadershipstyles, and the correlation coefficients werealso very weak between leadership style andsuccess rate. Still, the directions of the cor-relation coefficients make it possible to drawsome conclusions. While the correlation coef-ficients were negative in India and China, thecoefficient was positive in Estonia. Taking

into consideration the dominant leadershipstyles in these countries, the correlation coef-ficients may indicate that in all three countriesa moderate concentration of authority tends togive better results than both very autocraticand very participative. The same can be seenfrom Figure 3.

Employee Involvement and Success of

Change ProjectsTo evaluate the inf luence of employee involve-ment on the success of change projects, theauthors used the ANOVA test, correlationcoefficients (Appendix 7) and regression anal-yses.

In India, the ANOVA test showed significantdifferences between success rates in groups

where the level of employee involvement wasdifferent (F=2.768, Sig.=0.039); the correlationcoefficients also indicated satisfactory corre-lation between employee involvement and suc-cess rate at a significance level of 95%. Theregression analysis made it possible to providea formula for change management projects inIndian organizations (for the formula F=3.789,Sig.=0.016):

Success rate = -0.143 LCA 0.215 R + 0.281EI,

pative and 3 is autocratic), EI is the level ofemployee involvement on a scale of 0 to 4, (0means nobody and 4 ordinary employees), Rmeans the level of resistance, which was also

measured and analysed, but the results of thatstudy is beyond the scope of this article.In Estonia, the ANOVA test did not show sig-nificant differences between success rates ingroups where the level of employee involve-ment was different (F=1.118, Sig.=0.358); thecorrelation coefficients were also lower thanin the case of India. Still, the regression analy-sis allowed us to provide a formula for changemanagement projects in Estonian organiza-

tions (for the formula F = 5.205, Sig.=0.026):

Success rate = 0.292 EI,

where EI is the level of employee involvementon a scale of 0 to 4 (0 means nobody and 4ordinary employees). Including the level of theconcentration of authority and other factorsdid not give a statistically significant formulain the case of Estonia.

In China, the ANOVA test did not show sig-nificant differences between success rate ingroups where the level of employee involve-ment was different (F=1.500, Sig.=0.218); thecorrelation coefficients were also close tozero. The regression analysis did not give anyformula for success rates.All three methods showed that the success ofchange projects depends on leadership styleand employee involvement in India, and only

on employee involvement in Estonia. But thatsuch a dependency was almost non-existent inChina.

Conclusion and Discussion

Discussion of the Research Proposi-tions

This section will discuss the propositions pre-sented at the beginning of the article.P1: In the process of change implementa-

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participate providing them training and sup-port (Alas et al., 2008).

According to this study the authors cannot

reject the assumption that involving employ-ees gives better results despite the culturalbackground of organizational members. Butthe willingness to participate may still be dif-ferent and need further research.

P3: Participative leadership styles give dif-

ferent results in India, China and Estonia.

This proposition was not supported. Only inIndia did the success rate depend on the lead-

ership style. Although the statistical tests didnot show a significant correlation between theleadership style and the success rate in Chinaand Estonia, the direction of the correlationcoefficient indicated that in all three countriesa moderate concentration of authority maygive better results. Therefore, the authors ofthis study did not find evidence that the par-ticipative leadership style gives better results.

Summary of Findings

The research task in this study was to find outhow the leadership style of the change leaderand employee involvement depends on the cul-tural background of the members of the orga-nization. The research question was: Is theleadership style of the change leader differentin the cultures of India, China and Estonia? If

yes, then how do these differences influencethe success of change projects?

Based on the interviews, the leadership stylecorresponded accurately with Hofstedes

power distance and masculinity indices, butthe differences in leadership style did not sig-nificantly influence employee involvementin the decision-making process in India andEstonia. Even when the leadership style was

participative, lower level employees were onlyinvolved in decision-making in very few cases.Furthermore, although the leadership style in

not influence the success of the change proj-ects, the authors agree with Wei Sun (Sun andAlas, 2007) that this involvement was mostlymanipulative.

According to this study it can be concludedthat the success of the change process doesdepend on the level of employee involvementto decision-making in two very different cul-tures such as India and Estonia. Therefore,employee involvement should be included as acritical factor in the triangular model by RuthAlas (Alas, 2007).

Implications for Managers and Manage-ment Consultants

First. A moderate concentration of author-ity seems to give better results during changemanagement projects.Second. Despite the national culture of orga-nizational members, employee involvement indecision-making about the content and imple-

mentation of change is recommended in orderto achieve the goals set for change projects.

Limitations and Further Research

The size difference between the two Asiancountries and Estonia is huge, and the repre-sentativeness of 5060 companies per countryis low. The authors believe that the respondents

were chosen carefully and represent the expe-rience of change management. Nevertheless,it would be easier to generalize on the basisof the results if a larger number of companieswere included.

It would be interesting to compare the resultsof these three transition countries with resultsfrom a similar study in countries that haveenjoyed a more stable economic and social

environment. In addition, attitudes towardschange among employees in these coun-tries should also be studied. After studying

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tants involved in change management in thesecountries can be given.

AppendicesAppendix 1: Interview Questions Rel-evant to this Study

B2How would you describe this change pro-gramme according to its substance? It wasmeant to change: 0 all parameters; 1 mis-sion, corporate ideology; 2 business strategy;3 organizational structure; 4 distribution

of power, influence; 5 corporate culture, keyvalues; 6 management system as a whole; 7 -key people in the organization; 8 - qualitativestructure of the staff; 9 - production technol-ogy employed; 10 - rules and procedures ofeveryday work; 11 - functional systems; 12 -otherB5Who, in your opinion, was the leader of thechange in this particular situation? 1 owner;2 - company's leader; 3 - top management

team; 4 - middle managers; 5 - consultantsB7Did the company leader involve any of thecompany's employees in the decision-making

about the content of the change? 1 no; 2 - yes,these were top managers; 3 - yes, these werekey specialists; 4 - yes, these were middlemanagers; 5 - yes, these were ordinary people.

B8Did the company leader involve any of thecompany's employees in the decision-makingabout the change implementation process? 1 no; 2 - yes, these were top managers; 3 - yes,these were key specialists; 4 - yes, these weremiddle managers; 5 - yes, these were ordinary

people.B10How would you describe the level of con-centration of authority in the change programdevelopment and its implementation? 1 - high

(autocratic - all decisions are concentrated ontop management level); 2 medium (somedecisions are delegated to middle managers,heads of departments, etc.); 3 - low (participa-tive - wide range of employees is involved in

preparation of decisions and decision-making)E1How could you evaluate the results of theimplemented organizational change from the

point of view of the achievement of the goalsset for the change program by the company

leader? 0% - goals are not achieved at all,100% - goals are fully achieved.

Appendix 2

Table 3: Size of Indian organizations in the sample

Number of employees India China EstoniaLess than 30 3% 19% 46%

30 100 9% 21% 30%101 500 17% 21% 14%501 - 1000 14% 13% 0%

1001 5000 36% 21% 10%Over 5000 22% 6% 0%

Table 4: Categories of industry of the sample

Industry India China EstoniaProduction of goods for end users 25% 10% 12%Production of goods for business 31% 8% 8%

Providing services for end consumers 20% 31% 36%Providing services for end consumers 46% 17% 22%

Trade for end consumers 3% 14% 16%

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Table 5: The age of organizations in sample

Table 6: The statistical coefficients for leadership style in the scale of 1 to 3, where 1 is participative and 3 isautocratic style.

Table 7: The difference in leadership style in India, China and Estonia. t-test of Hypothesis 0: The leadershipstyle of change leader is similar in India and China, India and Estonia, and/or in China and Estonia.

Table 8: Correlation coefficients between employee involvement to decision making about change content andabout change implementation.

Age India China Estonia0 - 2 years 7% 11% 5%3 5 years 7% 24% 14%

6 10 years 12% 36% 25%11 15 years 14% 11% 32%16 20 years 18% 7% 16%Over 20 years 42% 11% 8%

Country Mean Median Mode Std. Deviation Skewness Kurtosis Minimum Maximum

India 2.44 2.00 3 0,601-0.5420.422

-0.5780.634

1 3

China 2.71 3.00 3 0.460-0.9310.333

-1.1810.656

2 3

Estonia 1.57 2.00 2 0.5630.3170.309

-0.8530.608

1 3

t df Sig. (2-tailed) Mean differencesStd.Error

differencesIndia and China 2.002 100.467 0.011 0.270 0.104

India and Estonia 7.984 110.431 0.000 0.870 0.109China and Estonia 11.723 108.841 0.000 1.139 0.097

Pearsons r Sig. (2-tailed) Kendalls tau Sig. (2-tailed) Spearmans rho Sig. (2-tailed)India 0.305 0.023 0.595 0.000 0.652 0.006China 0.342 0.010 0.340 0.002 0.380 0.004

Estonia 0.256 0.043 0.289 0.006 0.312 0.013

Appendix 3

Appendix 4

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Table 9: ANOVA test for hypothesis H0: There are no differences among the means of employee involvementin the groups where the leadership style is different. (Homogeneity of Variances: India Sig. = 0.258; ChinaSig.=0.413; Estonia Sig.=0.045)

Table 10: ANOVA test for hypothesis H0: There are no differences among the means of success rate in the groupswhere the leadership style is different. (Homogeneity of Variances: India Sig. = 0.009; China Sig.=0.832; Esto-nia Sig.=0.223)

Table 11: Correlation coefficients between leadership style and success rate.

Country Sum of squares df Mean Square F SigIndia Between groups 2.048 2 1.024 1.229 0.301

Within groups 43.333 52 0.833Total 45.382 54

China Between groups 7.255 1 7.255 4.132 0.048Within groups 86.039 49 1.756Total 93.294 50

Estonia Between groups 1.419 2 0.710 0.533 0.590Within groups 75.914 57 1.332Total 77.333 59




Estonia Between groups 0.506 4 0.126 0.382 0.821Within groups 17.563 53 0.331Total 18.069 57

Pearsons r Sig. (2-tailed) Kendalls tau Sig. (2-tailed) Spearmans rho Sig. (2-tailed)India -0.241 0.093 -0.268 0.040 -0.293 0.039China -0.171 0.245 -0.146 0.281 -0.157 0.286

Estonia 0.029 0.827 0.033 0.782 0.036 0.787

Appendix 5

Appendix 6

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Table 12: ANOVA test for hypothesis H0: There are no differences among the means of success rate in thegroups where the Level of employee involvement to decision making during change management projects.(Homogeneity of Variances: India Sig. = 0.103; China Sig.=0.082; Estonia Sig.=0.129)




Estonia Between groups 5.868 4 1.467 1.118 0.358Within groups 70.844 54 1.312

Total 76.712 58

Pearsons r Sig. (2-tailed) Kendalls tau Sig. (2-tailed) Spearmans rho Sig. (2-tailed)India 0.359 0.010 0.299 0.017 0.339 0.016China 0.135 0.533 0.075 0.533 0.097 0.502

Estonia 0.256 0.051 0.201 0.070 0.225 0.086

Appendix 7

Table 13: Correlation between employee involvement and success rate.

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