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Reassessing the role of Chinese workers in problem solving: A study of transformational leadership, trust, and security in ‘lean’ manufacturing Benbo Lia, Abraham Y. Nahmb*, Rebecca Wylandb, Jian-yu Keb, and Wei Yana

aSchool of Economics and Business Administration, Chongqing University, Chongqing, 400044, China bCollege of Business Administration, University of Wisconsin – Eau Claire, Eau Claire, 54701 WI, USA *Corresponding author. Email: nahmay@uwec.edu

Abstract

In this paper we study leadership style and organizational culture, elements that, we argue, are conducive

for Chinese shop-floor employees to participate in problem solving in ‘lean’ manufacturing. Power

distance and the concern for saving face potentially hinder employees’ willingness to participate in such

problem solving, but our findings support the notion that transformational leadership helps to overcome

these barriers. The relationships are not straightforward, however, and by examining the complexities,

this research may provide insights into this dilemma.

Keywords: China; ‘lean’ manufacturing; organizational culture; participation; security;

transformational leadership; trust

Introduction

Although a body of research on ‘lean’ manufacturing in a Western and Japanese context exists

(e.g., Marodin and Saurin 2013; Taylor, Taylor, and McSweeney 2013; Young 1992), scholars have

called for more studies of such manufacturing and operations management in other cultures (Metters,

Zhao, Bendoly, Jiang, and Young 2010). Since China is a rising economic power, an interest in operations

management processes specific to Chinese values is growing (Zhao, Flynn, and Roth 2006, 2007; Warner

2014).

Lean manufacturing, we argue, depends on shop-floor employees’ participation in problem

solving in order to reap the benefits (Nahm, Lauver, and Keyes 2012; Swartling and Poksinska 2013). For

Chinese managers, encouraging employees to participate in problem solving may require overcoming

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inherent cultural barriers. Specifically, high power distance might discourage problem-solving

involvement because workers in China may be accustomed to receiving directions from supervisors

(Hofstede 1983, 2001). Confucianism holds that workers understand their rank within the hierarchy (e.g.,

Casimir, Waldman, Bartram, and Yang 2006; Warner 2014). Further, the notion that ‘face’ or mianzi

needs to be protected (e.g., Gabrenya and Hwang 1996) is ingrained in Chinese culture. This may in itself

cause workers to avoid openly offering critiques of policies and procedures.

Although it may be challenging to overcome these barriers, we suggest that it is not an

insurmountable task. Specifically, we argue that managers who adopt a transformational leadership style

may be able to overcome these barriers. This leadership style would allow managers to focus on

collective goals because the focus is on inspiring employees to commit to organizational needs (e.g.,

Carless, Wearing, and Mann 2000; Colbert, Barrick, and Bradley 2014). Although primarily studied in

Western contexts (e.g., Dirks and Ferrin 2002), transformational leadership may allow Chinese managers

and workers to develop trusting relationships. Further, a trusting relationship can enhance workers’

perceptions of security in the workplace (Nahm, Lauver, and Keyes 2012). We suggest that these

elements can culminate into an organizational culture in which Chinese workers may be willing to offer

concerns without fearing their own or their supervisor’s loss of face. Our primary purpose is to provide

manufacturing managers in China with an insight into the elements of Chinese culture that may hinder

workers’ participation in problem solving and provide a possible remedy to it so that they may devise a

conceptual road map and plan for lean implementation.

To accomplish our goal, we propose a model that connects transformational leadership, trust in

management, perceived security, an organizational culture conducive for exchanging constructive

criticism, and the shop-floor employee’s role in participative problem solving. In so doing, we move

beyond simply applying Western-developed models to Eastern contexts. Instead, we develop constructs

unique to China that help cultivate a deeper understanding of the challenges involved in doing business in

China (Tsui, Schoonhoven, Meyer, Lau, and Milkovich 2004; Zhao, Flynn, and Roth 2006; Warner 2014).

Our research makes three contributions to the lean manufacturing literature. First, we introduce a model

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that explains the complex relationships between transformational leadership and employee participation.

Second, we contribute to an emerging body of Chinese research by developing new constructs unique to

China. Third, we inform research by demonstrating the importance of creating a culture conducive for

constructive criticism in Chinese manufacturing facilities. Chinese firms are undergoing numerous

institutional and regulatory changes (e.g., reform and downsizing of state-owned enterprises, loss of the

‘iron rice-bowl’ or tie fan wan) as well as experiencing an increased role on the part of trade unions. The

insights gained from this research may be useful and relevant for managers in China who wish to secure a

safety-net for workers previously offered by the state.

Literature review

Researchers agree that workers’ participation in problem solving is important for manufacturing

excellence (e.g., Swartling and Poksinska 2013) and time-based manufacturing practices (e.g.,

reengineering setups, quality-improvement, and pull-production) (Koufteros, Vonderembse, and Doll

1998).

Although trends suggest that China is a manufacturing powerhouse, a time may soon come when

a need arises to change the focus away from mass production of adequate products to producing varieties

of high quality products. In order to make this transition, employees at all levels may need to participate

in problem solving (Koufteros, Vonderembse, and Doll 1998). However, high power distance and

concern for saving face may initially act as barriers.

First, high power distance is associated with centralization of authority (Hofstede 1983), which

could potentially hinder continuous improvement:

“In countries with high Power Distances…. individual subordinates as a rule do not want to

participate. It is part of their expectations that leaders lead autocratically, and such subordinates

will, in fact, by their own behaviour make it difficult for leaders to lead in any other way.”

(Hofstede 1983, 87; emphasis added)

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The second aspect of Chinese culture that may hamper continuous improvement is the concern

for ‘saving face’ (Gabrenya and Hwang 1996). This practice could, in turn, discourage shop-floor

employees from raising criticisms. In other words, workers may avoid raising concerns that could cause

their superiors to lose face. Additionally, workers may be hesitant to make suggestions that may cause

their own loss of face, and this could happen if a suggestion is openly rejected.

To overcome these cultural barriers, Chinese manufacturing managers could exercise a leadership

style that would gradually build a culture conducive to workers’ active participation (Gao, Ting-Toomey,

and Gudykunst 1996; Huang, Rode, and Schroeder 2011). To gain insights into this challenge, we draw

on the leadership and organizational behaviour literature in the field.

Theoretical foundation and hypotheses

Transformational leadership has been studied extensively (e.g., Colbert, Barrick, and Bradley

2014; Podsakoff, MacKenzie, Moorman, and Fetter 1990). A transformational leader (1) communicates

vision, (2) develops staff, (3) provides support, (4) empowers staff, (5) is innovative, (6) leads by example,

and (7) is charismatic (Carless, Wearing, and Mann 2000). There are two perspectives on the use of

transformational leadership in different cultures. First, some scholars argue that the values of what

constitutes effective leadership could vary across cultures (e.g., Blunt and Jones 1997; Karakitapoğlu-

Aygün and Gumusluoglu 2013). Other scholars counter that transformational leadership is endorsed as

contributing to effective leadership (Den Hartog, House, Hanges, Ruiz-Quintanilla, Dorfiman et al. 1999)

regardless of culture (Spreitzer, Perttula and Xin 2005).

We hold the latter viewpoint and suggest that, though potentially challenging to adopt,

transformational leadership could be effective in increasing participation in Chinese manufacturing

facilities for two primary reasons. First, if manufacturers in China begin to focus on quality rather than

adequate products, workers will need to endorse change interventions. One effective way to lead change

interventions is to inspire subordinates to focus on organizational outcomes (Burns 1978). Inspiring

followers is a core value of transformational leadership. Second, transformational leaders are able to

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create an environment where workers pursue collective goals (Colbert, Barrick and Bradley 2014). An

interest in collective outcomes is rooted in Chinese culture (Hofstede 2001; Warner and Zhu 2002).

Although transformational leadership may be effective in China (e.g., Schaubroeck, Lam, and Cha 2007),

preliminary evidence suggests that employees do not perceive high levels of it (Hsu and Chen 2011).

Thus, research to understand its role in lean manufacturing is merited. We offer the following research

model and hypotheses (Figure 1).

***** Insert Figure 1 about here *****

Leadership and trust

The concept of ‘connections’ or guanxi is rooted in Chinese culture and refers to a relationship

between people that could be positive (Su, Sirgy and Littlefield 2003) or negative (Dunfee and Warren

2001). In this research, we focus on positive guanxi due to our desire to find its relationship with

constructs considered positive. Because relationships are crucial in Chinese work environments, we

believe that workers’ trust in management is a key component of successful lean manufacturing

implementation. Trust in management also has multiple dimensions. For example, McAllister (1995)

categorized trust as affect- and cognition-based. Affect-based trust involves an emotional- and

relationship-centered trust, whereas cognition-based trust involves rational evaluation of managements’

trustworthiness (McAllister 1995). Most of the research supporting the link between transformational

leadership and trust has been studied in Western contexts (e.g., Podsakoff, MacKenzie, Moorman, and

Fetter 1990). Recently, scholars proposed this relationship within an Eastern context (Shih, Chiang, and

Chen 2012; Zhu and Akhtar, 2014), but we focus on Chinese manufacturing firms and apply these tenets

to suggest:

Hypotheses 1a-b. Transformational leadership will be positively associated with (a) affect-based

and (b) cognition-based trust in management.

Leadership and security

Following this premise, we argue that transformational leadership has a positive association with

perceptions of security. Specifically, transformational leaders instil confidence in followers, which may

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lead to perceptions of security. Research suggests that workers’ perceived security improves participation

in improvement efforts (Nijstad, Berger-Selman, and De Dreu 2014; Nembhard and Edmondson 2006;

Nahm, Lauver, and Keyes 2012). For example, Nahm, Lauver, and Keyes (2012) demonstrated that job

security improved lean implementation. We believe that Chinese workers’ perceived security includes

more than job security. We argue that it also includes perceived security in guanxi relationships (Wong,

Wong, and Wong 2010). Friedman, Chi, and Liu (2006) found that Chinese workers avoided conflicts

that hindered superior relationships. Further, we believe that Chinese workers want to be considered loyal

followers. Chen (1995) mentioned that in Eastern contexts, a person’s worth is often judged on loyalty.

Tse, Huang, and Lam (2013) demonstrated that transformational leadership had positive effects upon

Chinese workers’ affective commitment and turnover intention. Thus, we suggest:

Hypotheses 2a-c. Transformational leadership will have a positive association with workers’

perceived security in (a) jobs, (b) guanxi relationships, and (c) loyalty perceptions.

Leadership and culture

In order for Chinese workers to offer opinions, we believe that the organization needs to have a

culture that is conducive to exchanging constructive criticism, which we conceptualize as a culture where

employees do not fear losing face or causing superiors to lose face. We contend that this type of culture

encourages workers to overcome power distance. Further, we believe that transformational leaders could

foster an organizational culture that encourages workers to voice opinions in a non-intimidating

environment (Nijstad, Berger-Selman, and De Dreu 2014). Findings support the relationship between

transformational leadership and offering improvement-oriented voice in a Western context (Nembhard

and Edmondson 2006). We apply these findings and our logic to Chinese workers and suggest:

Hypotheses 3a-b. Transformational leadership will have a positive association with an

organizational culture conducive for exchanging constructive criticism with workers having (a)

no fear of losing face, and (b) no fear of causing the boss to do so.

Trust and security

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As workers’ trust increases, it is likely that perceived security will improve. McAllister (1995)

demonstrated that people with high levels of affect-based trust often take others’ problems as their own.

High affect-based trust should then lead to more security in jobs, guanxi relationships (Wong, Wong and

Wong 2010), and loyalty perceptions. Cognition-based trust should also lead to security perceptions

because workers would cognitively evaluate managers’ professionalism and competence (McAllister

1995). Thus, we propose:

Hypothesis 4a-c. Workers’ affect-based trust will have a positive association with workers’

perceived security in (a) jobs, (b) guanxi relationships, and (c) loyalty perceptions.

Hypothesis 4d-f. Workers’ cognition-based trust will have a positive association with workers’

perceived security in (d) jobs, (e) guanxi relationships, and (f) loyalty perceptions.

Trust and culture

Researchers argue that trust leads to risk taking (e.g., Colquitt, Scott, and LePine 2007; Mayer,

Davis, and Schoorman 1995). We argue that Chinese workers need to develop trust before risking their

own or their supervisor’s loss of face by raising concerns. Consistency of managers’ trustworthy

behaviour could facilitate an organizational culture in which the workers are not afraid to speak up. Thus,

we suggest:

Hypothesis 5a-b. Workers’ affect-based trust will have a positive association with organizational

culture conducive for exchanging constructive criticism with workers having (a) no fear of losing

face and (b) no fear of causing the boss to do so.

Hypothesis 5c-d. Workers’ cognition-based trust will have a positive association with

organizational culture conducive for exchanging constructive criticism with workers having (c)

no fear of losing face and (d) no fear of causing the boss to do so.

Security and culture

As security increases, workers may offer more suggestions without the fear of losing face (Dirks

and Ferrin 2001). Collins and Smith (2006) demonstrated that commitment-based practices (e.g.,

mentoring programs) were related to organizational climates of cooperation. Nijstad, Berger-Selman and

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De Dreu (2014) showed that in a psychologically safe team climate, dissenting minority opinions were

used effectively in creating radical innovations.

Chinese workers have been gradually losing the job security they once enjoyed due to changes in

labour laws, human resource management practices, and firms’ competitive environment (Warner and

Zhu, 2002; Zhu, Zhang, and Shen 2012; Loi, Ngo, Zhang, and Lau 2011). These changes in working

environment should heighten the impact of workers’ perceived security upon organizational performance

and worker behaviour. Loi, Ngo, Zhang, and Lau (2011) demonstrated that in situations with lower

perceived job security, the impact of the leader-member exchange on Chinese workers’ performance and

employee altruistic behaviour was stronger than in a more secure environment.

Regarding Chinese workers’ participation in resolving conflict, Friedman, Chi, and Liu (2006)

asserted: “If managers want to enhance open discussion of conflicts, they need to manage their

employees’ environment in such a way that employees do not perceive that open disagreements will

damage relationships, breaking the first link in the expectancy model” (2006, 87). In other words,

managing behavioural expectations will affect relationships while encouraging Chinese workers to be

more open. We apply this same notion to the context of problem solving and suggest:

Hypothesis 6a-b. Workers’ perceived security in jobs will have a positive association with

organizational culture conducive for exchanging constructive criticism with workers having (a)

no fear of losing face and (b) no fear of causing the boss to do so.

Hypothesis 6c-d. Workers’ perceived security in guanxi relationships will have a positive

association with organizational culture conducive for exchanging constructive criticism with

workers having (c) no fear of losing face and (d) no fear of causing the boss to do so.

Hypothesis 6e-f. Workers’ perceived security in loyalty perceptions will have a positive

association with organizational culture conducive for exchanging constructive criticism with

workers having (e) no fear of losing face and (f) no fear of causing the boss to do so.

Trust and participation

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When workers trust their managers’ ability (cognition-based) and good will (affect-based), they

will be more willing to participate. Collins and Smith (2006) found that social climates of trust were

related to a firm’s capability to exchange and combine knowledge. Cheung and Wu (2014) showed that

high-quality leader-member exchange based on trust, coupled with participatory management, leads to

greater openness among Chinese workers. Chan (2014) also demonstrated that moral leadership had a

direct effect on employee voice in Chinese workers. We draw on this literature and offer:

Hypothesis 7a-b. Workers’ (a) affect-based trust and (b) cognition-based trust will have a

positive association with participation in problem solving.

Security and participation

Nembhard and Edmondson (2006) and Nijstad, Berger-Selman, and De Dreu (2014) asserted that

the workers’ psychological safety is a key antecedent of speaking up. Further, Nahm, Lauver, and Keyes

(2012) found that perceptions of job security tends to improve lean implementation and participation. In

other words, until Chinese workers perceive security in their jobs, they may hesitate to participate in

problem solving. Findings support this contention in other Eastern countries. For example, employees in

Japan are not opposed to suggesting process improvements, since they are not afraid of losing their job

(Young 1992). We draw from these findings and suggest:

Hypothesis 8a-c. Workers’ perceived security in (a) jobs, (b) guanxi relationships, and (c) loyalty

perceptions will have a positive association with participation in problem solving.

Culture and participation

Studies have focused on workers’ trust (Collins and Smith 2006) and sense of security (Friedman,

Chi, and Liu 2006; Nahm, Lauver, and Keyes 2012; Nembhard and Edmondson 2006; Young 1992) as

antecedents to participation in problem solving. We argue that an organizational culture conducive for

exchanging constructive criticism without having to worry about losing face is another important factor

that needs to be considered in China. Therefore, we propose:

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Hypothesis 9a-b. An organizational culture conducive for exchanging constructive criticism with

workers having (a) no fear of losing face and (b) no fear of causing the boss to do so will have a

positive association with participation.

Methodology

This research used existing scales as well as employed generally accepted survey development

methodology to create new constructs. Existing scales included transformational leadership style (Carless,

Wearing, and Mann 2000), trust in management (McAllister 1995), job security (Nahm, Lauver, and

Keyes 2012) and shop-floor employee participation in problem solving (Koufteros, Vonderembse, and

Doll 1998). Scales that were developed in this study included security in guanxi relationships and in

perceived loyalty, as well as organizational culture conducive for exchanging constructive criticism.

Items were first translated from English to Chinese by two translators. Three Chinese-American

business faculty members evaluated the Chinese translations based on the formal similarity of words,

phrases, and sentences and the degree to which the two versions would engender the same attitude

response. These evaluations helped refine the Chinese version of the questionnaire. The questionnaires

were then back translated by two translators in order to compare and ensure accuracy of the final version.

The survey was eventually administered in six manufacturing plants near Chongqing, China.

Chongqing has a large manufacturing base (Zhao, Flynn, and Roth 2006). The city is more

culturally conservative than Southern and Eastern parts of China (The Economist, 26 November

2011), making it a fitting location for culture-based research. The plants were chosen to maximize

generalizability of the findings across form of ownership and size (Table 1).

Out of 240 responses gathered (40 per plant), we dropped 21 due to several unanswered questions.

Workers were told that individual responses were to remain anonymous. The survey was developed in a

way that, regardless of education level, participants would be able to understand the items. Nonetheless,

most (approximately 88%) of the respondents reported having a high school diploma. There were 26

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workers with no high school diploma, but who had between 2 and 5 years of industry experience. Further,

there was a wide distribution of responses on measures such as cognition-based trust in management,

which suggests that workers did not succumb to culture pressures of pleasing supervisors. In total, we

believe there is high credence to the survey results.

***** Insert Table 1 about here *****

Results

We used standard procedures to test for reliability and validity of items. Exploratory factor

analysis upon newly developed scales resulted in 15 newly developed items. Combined with the 26 items

from previously established constructs, the total responses (219)-to-questionnaire-items (41) ratio was

5.34:1. The mean and standard deviations for newly developed items are in the Appendix.

Confirmatory factor analysis of scales resulted in a sufficient data-to-model fit (χ2/df=2.03,

RMSEA=0.068, NFI=0.92, NNFI=0.96, CFI=0.96). All items had above 0.60 factor loadings (except two

in NFB3 and NFB4, with 0.54 and 0.57, respectively), indicating the presence of unidimensionality and

convergent validity.

The high scores in composite reliability suggest evidence of reliability (Table 2). Discriminant

validity was supported with two methods: structural equation modelling methodology (Bagozzi and

Phillips 1982) and the average variance extracted compared with squared correlation between constructs

(Fornell and Larcker 1981).

***** Insert Table 2 about here *****

Hypotheses were tested by examining the structural model (Tables 3-6, Figure 2). The results

suggest that transformational leadership has a positive effect upon trust in management (Table 3: γ=.65,

t=7.36 upon affect-based trust, and γ=.78, t=9.02 upon cognition-based trust). Thus, H1a-b were

supported. However, transformational leadership does not appear to have a direct effect upon workers’

perceived security (H2a-c). Additionally, transformational leadership does not appear to have a direct

impact on the construct of organizational culture conducive for exchanging constructive criticism (H3a-b).

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Nonetheless, transformational leadership had a significant indirect and total effect upon all constructs of

workers’ perceived security and of organizational culture conducive for exchanging constructive criticism

(latter two columns of Table 3).

***** Insert Table 3 about here *****

***** Insert Figure 2 about here *****

Among the different types of trust, affect-based trust appears to provide a greater sense of

security to workers (β=.50, t=4.57 upon perceived job security, β=.53, t=4.92 upon perceived security in

guanxi, and β=.35, t=4.03 upon perceived security in loyalty). Thus, H4a-c were supported. Cognition-

based trust in management also had a significant effect upon perceived security in loyalty (β=.36, t=3.33,

H4f), but not upon perceived job security (H4d) or security in guanxi relationships (H4e).

***** Insert Table 4 about here *****

Unexpectedly, affect-based trust did not directly create an organizational culture conducive for

constructive criticism. Thus, H5a-b were not supported. However, affect-based trust had a significant

indirect effect upon both elements of the organizational culture, and a significant total effect only upon no

fear of the boss losing face (Table 5). It appears that Chinese workers carefully guard each other’s dignity

when they have an affect-based trusting relationship with management, coinciding with Chan’s (2014)

finding. Only when their affect-based trust in management was filtered through perceived security (the

indirect effect) did the workers seem willing to make constructive criticism without fear of losing face.

Cognition-based trust had a positive effect on having no fear of causing the boss to lose face

(β=.30, t=2.11, H5d), but not on fear of losing one’s own (H5c). In other words, when workers perceived

their boss as competent and capable, they did not fear their boss losing face, but they did fear losing face

themselves. Again, only when their cognition-based trust in management was filtered through perceived

security (the indirect effect) were the workers willing to speak up without fear of losing face.

Perceived job security and security in loyalty had a positive effect upon workers having no fear of

losing face (β=.21, t=1.82, H6a; and β=.34, t=2.77, H6e, respectively). Interestingly, the two security

constructs did not impact fear of causing the boss to lose face; thus, H6b and H6f were not supported. On

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the other hand, workers’ perceived security in guanxi relationships had a positive relationship upon

having no fear of causing the boss to lose face (β=.16, t=1.72, H6d), but not on one’s own fear of losing

face(H6c not supported).

***** Insert Table 5 about here *****

Cognition-based trust had a positive effect upon participation in problem solving (β=.18, t=1.74,

H7b), but affect-based trust did not (H7a) (Table 6). Since the latter almost had a significant indirect

effect (t=1.54), we can assume that it contributes to participation in problem solving by providing a sense

of security (H4a-c) and through an indirect relationship with organizational culture conducive for sharing

constructive criticism (indirect effects of H5a-b).

Perceived job security had a positive direct effect upon employee participation in problem solving

(β=.22, t=2.01, H8a), while perceived security in guanxi did not (H8b). Surprisingly, perceived security

in loyalty had a negative effect upon employee participation (β=-.22, t=-1.87, H8c). This was cancelled

out by a positive indirect effect (t=2.54), resulting in an insignificant total effect (t=-.56). The negative

significant direct effect from perceived security in loyalty upon employee participation was a surprise

nonetheless.

The organizational culture conducive for exchanging constructive criticism had a positive effect

upon employee participation (H9a-b, Table 6). The effect of not fearing the loss of face upon shop-floor

employee participation was β=.37 (t=4.63), whereas that from having no fear of causing the boss to lose

face was β=.21 (t=2.33).

***** Insert Table 6 about here *****

Discussion

Our results support the notion that transformational leadership can positively affect Chinese shop-

floor employees’ participation in problem solving. The mechanisms by which this happens, however,

appear to be more complicated than originally proposed. Transformational leadership does not appear to

directly increase the workers’ sense of security or decrease perceptions of fear of exchanging constructive

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criticisms. However, transformational leadership increases trust in management. It is through enhanced

trust that transformational leaders can have a positive, indirect effect upon other desirable elements,

including the indirect effect upon employee participation in problem solving.

Also, affect-based trust in management appears to take on a greater role than cognition-based

trust when increasing perceptions of security. However, this by no means implies that cognition-based

trust is not important. Specifically, cognition-based trust appears to have a direct effect upon the

organizational culture conducive for exchanging constructive criticism. Interestingly, affect-based trust

appears to have indirect effects (through perceived security). In other words, our findings suggest that

both types of trust in management are necessary when creating a culture that is conducive to worker

participation in China.

Further, different types of security perceptions have different ways of impacting organizational

culture that is conducive for exchanging constructive criticisms. One interesting finding suggests that

Chinese workers are more likely to offer constructive criticism without fear of losing face when they have

a sense of security regarding their job and in loyalty. However, these perceptions do not embolden

workers to risk causing their boss to lose face. In other words, as long as the employees perceive job

security and they think their boss sees them as loyal, the employees may be more willing to risk

embarrassing themselves and losing face. However, causing the boss to lose face seems to be different; it

may put the employee at risk of losing job security and loyalty perceptions.

It is quite interesting, then, how perceived security in guanxi has a counter effect. Guanxi

perceptions seem to embolden workers to risk causing their boss to lose face. However, security in guanxi

does not encourage workers to risk losing face themselves. It appears that perceived security in guanxi

gives workers an extra layer of security beyond that provided by their workplace; thus, there is less

concern for causing their boss to lose face. However, workers may be reluctant to lose face because it

may diminish the value of the guanxi relationship in their boss’s eyes. The picture that emerges from the

above analysis appears to support the notion that, in a Chinese culture, saving face is a complex

endeavour that would take time and effort for foreign managers to fully understand and navigate.

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Further, the complex nature of saving face seems to be the underlying reason that affect-based

trust in management does not have a significant relationship with problem-solving participation, while

cognition-based trust does. Workers may be protecting the affect-based trust relationships when deciding

not to participate, but when trust in management is cognitive in nature and there is less concern for the

boss to lose face, workers seem to participate more.

The issue of saving face, we go on to argue, may also be the underlying dynamic behind why (1)

perceived job security increases participation in problem solving (no concern for losing face); (2)

perceived security in guanxi does not increases participation in problem solving (there is a desire to

preserve the guanxi relationship); and (3) perceived security in loyalty decreases participation in problem

solving activities (a concern for losing that security that is valued).

Taken together, it seems as though Chinese workers will participate in problem-solving when a

conducive organizational culture evolves. In other words, when there is no fear of losing face or the

boss’s face.

Implications for theory and practice

This research has practical implications. Specifically, firms can look to these findings when

establishing a continuous improvement culture in China. This research shows that transformational

leadership can be an engine for changes in organizational culture, starting from workers trusting their

managers, feeling more secure in their workplace, and eventually participating more freely in

improvement projects without fearing the loss of face. Given the changes in labour relations, increased

uncertainty and the possibility of losing their job, the positive effects of transformational leadership

should be a welcome remedy for Chinese workers.

Further, from a theoretical perspective, this research contributes to research models that currently

serve as the foundation for lean manufacturing. The research outcomes align with the thought that

transformational leadership, although conceptualized in a Western context, can be beneficial in culturally

diverse places like China. At the same time, our findings also support the notion that applying Western

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models without consideration of unique cultural variables may not be the best practice. Our newly

developed variables offer interesting insights into the complex relationships between transformational

leadership, trust in management, security, and organizational culture.

Limitations and future research

Due to the cross-sectional design, we are unable to draw conclusions about causality between

variables. Future research can, thus, attempt longitudinal design.

Since we planned to introduce constructs, we wanted to develop a model that was easy to

interpret. As such, we choose to focus on two of the most cited Chinese cultural elements (e.g., Casimir,

Waldman, Bartman, and Yang 2006; Hsu and Chen 2011). However, we do not intend to argue that these

are the only important cultural considerations. Thus, we urge scholars to consider additional cultural

elements, such as their focus on group harmony. The study was conducted within a single country.

Exploring the relationships in other eastern regions might be interesting for future studies, given the

diversity in Asian management culture (Minkov and Blagoev 2014; Warner 2013).

Lakshman (2013) advocates hiring biculturals (i.e., people who have more than one cultural

profile) because they may be in a better position to manage the complexity and nuances of culture.

Understanding the role of biculturals when building cultures that are conducive to participation would be

a fruitful topic for future research.

On the other hand, Tang and Koveos (2008) suggest that Hofstede’s cultural value dimensions

may need to be updated. For example, given China’s rapid economic development, some elements of the

Chinese culture may start to emulate Western culture. Also contributing to the cultural change are the

changes in the demographic of the labour force. In China, ‘new-generation’ workers, who were born in or

after 1980, push the development of the labour-intensive industries that supply many of China’s exports

and thus contribute in a major way to the Chinese economy. Of the more than 225 million Chinese

workers in labour-intensive jobs, more than 60% are ‘new-generation’ workers (National Bureau of

Statistics of China 2012). Ralston, Egri, Stewart, Terpstra, and Yu (1999) and Warner (2014) also report

17

that younger Chinese managers are more individualistic than the previous generation of managers. Thus,

another merited area of future research is to examine whether these changing values result in more worker

participation in problem-solving activities.

Conclusions

This study, we believe, has made a significant contribution to the literature by exploring the

factors that facilitate shop-floor employee participation in problem solving in China. Further, this

research provides scholars and managers a glimpse into the mind-set of Chinese workers to gain an

understanding of the interplay among relevant variables.

Given the need for Chinese manufacturing firms to move away from traditional mass production

of acceptable quality to a variety of products of high quality, managers in China could benefit from the

implications contained in this research. They could exercise transformational leadership that would shape

an organizational culture conducive for exchanging constructive criticism without the fear of losing face,

for it could go a long way towards creating a culture of continuous improvement in their organizations

that would contribute to their future success.

In this context, we note that Tsui, Schoonhoven, Meyer, Lau, and Milkovich (2004) have called

for studies that develop unique Chinese constructs in order to capture aspects of the culture rather than

simply comparing Chinese and Western managers’ beliefs and attitudes. This research duly attempts to

answer that call by developing constructs that have been translated into Chinese and thoroughly tested.

These constructs, we conclude, may possibly be used in future studies to shed more light on the

participative process in organizations in cross-cultural contexts.

===========================================

Biographical notes Benbo Li is an Associate Professor of Operations Management at Chongqing University, China. He

received his PhD in Technology Economics and Management from Chongqing University. His current

research interests include operations management, quality management, and strategic management.

18

Abraham Y. Nahm is a Professor of Operations Management at University of Wisconsin-Eau Claire,

USA. He received his PhD in Manufacturing Management and Engineering from the University of

Toledo. His research interests are in organizational culture and structural issues in post-industrial

manufacturing.

Rebecca l. Wyland is an Assistant Professor of Management at University of Wisconsin–Eau Claire,

USA. She received her PhD in Organizations and Strategic Management from the University of

Wisconsin – Milwaukee. Her current research interests include work–family balance, work–school

balance, and leadership.

Jian-yu (Fisher) Ke is an Assistant Professor at Wisconsin-Eau Claire, USA. He received his PhD in

Supply Chain Management from University of Maryland, College Park. He had worked for DHL Taiwan

as a research and planning manager for seven years. His research interests are on the impact of

macroeconomic factors, such as fuel costs and globalization, on supply chain management.

Wei Yan is an Associate Professor of Management at Chongqing University, China. He received his PhD

in Economics from Huazhong University of Science and Technology. His research interests include

cooperation and competition in tournament mechanism, human resource management, and personnel

economics.

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Table 1. Plant characteristics

Product Size Ownership

Valves Small Private

Wind turbines Medium State

Flowmeters Medium Joint venture (Japanese-Chinese)

Flowmeters Large State

Automobiles Large State

Motorcycles Large Private

29

Table 2. Descriptive statistics, correlations, composite reliability, average variance extracted, and discriminant validity tests

Constructs Mean Standard deviation (1) (2) (3) (4) (5) (6) (7) (8) (9)

Transformational Leadership!(1) 5.34 1.11 .89a (7-items) [.53]b

Affect-based Trust in Management!(2) 4.85 1.17 .514** .84 (5-items) (323.49)c [.51]

Cognition-based Trust in Management!(3) 5.15 1.09 .647** .701** .87 (5-items) (241.71) (79.36) [.57]

Perceived Job Security!(4) 5.32 .98 .471** .530** .496** .83 (5-items) (295.10) (198.20) (264.04) [.49]

Perceived Security in Guanxi!(5) 4.81 1.15 .370** .497** .458** .555** .87 (5-items) (607.47) (334.48) (536.44) (216.89) [.58]

Perceived Security in Loyalty!(6) 5.24 1.16 .556** .568** .640** .505** .554** .88 (3-items) (250.95) (220.91) (187.07) (252.89) (281.48) [.71]

No Fear of Losing Face!(7) 5.58 1.04 .281** .263** .339** .334** .292** .405** .88 (3-items) (337.82) (330.52) (313.52) (359.92) (316.84) (303.07) [.72]

No Fear of Boss Losing Face!(8) 4.89 1.11 .364** .370** .457** .326** .390** .396** .244** .81 (4-items) (210.82) (220.44) (163.78) (229.24) (234.48) (185.59) (267.86) [.52]

Shop-floor Employee Participation (9) 5.66 .99 .328** .262** .334** .376** .319** .276** .424** .311** .89 (4-items) (530.56) (508.30) (553.83) (379.33) (526.81) (321.42) (291.01) (226.87) [.66]

Note: ** Correlation is significant at the 0.01 level (2-tailed t-test, df = ∞). a Composite reliabilities are on the diagonal. b Average variances extracted are on the diagonal in brackets. c χ2 differences are indicated in parentheses. All differences in χ2 for 1 degree of freedom are significant at 0.001.

30

Table 3. Hypotheses testing and direct / indirect effects of transformational leadership

Hypotheses Direct Effect Indirect Effect Total Effect

H1a 0.651 (7.36**2) - 0.65 (7.36**)

H1b 0.78 (9.02**) - 0.78 (9.02**)

H2a 0.21 (1.50) 0.38 (2.97**) 0.59 (6.08**)

H2b 0.01 (0.09) 0.44 (3.41**) 0.46 (5.60**)

H2c 0.17 (1.36) 0.51 (4.47**) 0.67 (8.30**)

H3a -0.04 (-0.25) 0.38 (2.78**) 0.34 (4.35**)

H3b 0.04 (0.27) 0.44 (3.18**) 0.48 (5.20**)

Note: 1. Numbers are standardized coefficients. 2. Numbers in parentheses are t-values. * Significant at α < 0.05, ** significant at α < 0.01 (one-tailed t-test, df = ∞).

31

Table 4. Hypotheses testing of trust in management upon perceived security

Hypotheses Direct Effect Indirect Effect Total Effect

H4a 0.501 (4.57**2) - 0.501 (4.57**2)

H4b 0.53 (4.92**) - 0.53 (4.92**)

H4c 0.35 (4.03**) - 0.35 (4.03**)

H4d 0.07 (0.55) - 0.07 (0.55)

H4e 0.13 (1.05) - 0.13 (1.05)

H4f 0.36 (3.33**) - 0.36 (3.33)

Note: 1. Numbers are completely standardized coefficients. 2. Numbers in parentheses are t-values. * Significant at α < 0.05, ** significant at α < 0.01 (one-tailed t-test, df = ∞).

32

Table 5. Hypotheses testing and direct / indirect effects of trust in management and perceived security upon organizational culture

Hypotheses Direct Effect Indirect Effect Total Effect

H5a -0.171 (-1.172) 0.26 (2.57**) 0.08 (0.80)

H5b 0.02 (0.14) 0.16 (1.70*) 0.18 (1.70*)

H5c 0.14 (0.97) 0.14 (2.21*) 0.28 (2.07*)

H5d 0.30 (2.11*) 0.07 (1.43) 0.37 (2.73**)

H6a 0.21 (1.82*) - 0.211 (1.82*2)

H6b 0.05 (0.43) - 0.05 (0.43)

H6c 0.07 (0.77) - 0.07 (0.77)

H6d 0.16 (1.72*) - 0.16 (1.72*)

H6e 0.34 (2.77**) - 0.34 (2.77**)

H6f 0.14 (1.19) - 0.14 (1.19)

Note: 1. Numbers are completely standardized coefficients. 2. Numbers in parentheses are t-values. * Significant at α < 0.05, ** significant at α < 0.01 (one-tailed t-test, df = ∞).

33

Table 6. Hypotheses testing and direct / indirect effects upon employee participation

Hypotheses Direct Effect Indirect Effect Total Effect

H7a -0.101 (-0.712) 0.16 (1.54) 0.06 (0.67)

H7b 0.18 (1.74*) 0.13 (1.53) 0.31 (2.97**)

H8a 0.22 (2.01*) 0.09 (1.73*) 0.30 (2.62**)

H8b 0.11 (1.27) 0.06 (1.41) 0.17 (1.82*)

H8c -0.22 (-1.87*) 0.15 (2.54**) -0.07 (-0.56)

H9a 0.37 (4.63**) - 0.37 (4.63**)

H9b 0.21 (2.33**) - 0.21 (2.33**)

Note: 1. Numbers are completely standardized coefficients. 2. Numbers in parentheses are t-values. * Significant at α < 0.05, ** significant at α < 0.01 (one-tailed t-test, df = ∞).

Appendix A. Newly developed items entering large-scale survey Constructs Measurement items Mean S.D.

Perceived Security in Guanxi

GS1. The guanxi relationship between my supervisor and I is valuable to him/her.

GS2. The guanxi relationship between my supervisor and I has been beneficial for him/her.

GS3. I have a close guanxi relationship with my supervisor.

GS4. The guanxi relationship I have with someone besides my supervisor is valuable to him/her.

GS5. The guanxi relationship I have with someone besides my supervisor has been beneficial to him/her.

4.94

4.86

4.60

4.77

4.89

1.43

1.32

1.44

1.52

1.38

Perceived Security in Loyalty

LS1. My supervisor believes that I am loyal to him/her.

LS2. My supervisor believes that I am loyal to this organization.

LS3. I am confident that my supervisor trusts me in my loyalty.

5.11

5.28

5.34

1.34

1.28

1.26

No Fear of Losing Face

NFF1. I do not fear losing face when I privately make a suggestion for change to my supervisor.

NFF2. I do not fear losing face when I make a suggestion for change to my supervisor in a group setting.

NFF3. I do not fear losing face when I make a suggestion for change to the group in a group setting.

5.65

5.55

5.53

1.14

1.18

1.13

No Fear of Boss Losing Face

NFB1. I do not fear my supervisor will lose face when I make a suggestion for change to my supervisor in a group setting.

NFB2. I do not fear my supervisor will lose face when I make a suggestion for change to the group in a group setting.

NFB3. Even though my supervisor may lose face when I make suggestion for change to my supervisor in a group setting, I don’t think

he will be angry with me.

NFB4. Even though my supervisor may lose face when I make suggestion for change to the group in a group setting, I don’t think he

will be angry with me.

4.82

4.96

4.92

4.87

1.42

1.43

1.35

1.35

26

Figure 1. Research model and hypotheses

Transformational Leadership

Trust in Management ! Affect-based ! Cognition-based

Perceived Security ! Perceived Job

Security ! Perceived Security in

Guanxi Relationship ! Perceived Security in

Loyalty

Organizational Culture Conducive for Exchanging Constructive Criticism ! No Fear of Losing Face ! No Fear of Causing the

Boss to Lose Face

Shop-floor Employee Participation in Problem Solving

H1a-b H2a-c H4a-f H5a-d H3a-b H7a-b H6a-f

H8a-c H9a-b

27

Figure 2. Results of hypotheses testing Note: Solid lines denote positive, significant relationships

Light dotted lines denote insignificant relationships Long-short dotted line denotes negative, significant relationship

Transformational Leadership Trust in Management

! Affect-based

Perceived Security ! Perceived Job

Security

Organizational Culture Conducive for Exchanging Constructive Criticism

! No Fear of Losing Face

Shop-floor Employee Participation in Problem Solving

Trust in Management ! Cognition-based Perceived Security ! Perceived Security in

Guanxi Relationship

Perceived Security ! Perceived Security

in Loyalty

Organizational Culture Conducive for Exchanging Constructive Criticism

! No Fear of Causing the Boss to Lose Face