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The Impact of Participative Leadership Behavior on Psychological

Empowerment and Organizational Commitment in Chinese State-Owned
Enterprises: The Moderating Role of Organizational...

Article  in  Asia Pacific Journal of Management · February 2006

DOI: 10.1007/s10490-006-9006-3 · Source: RePEc

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Asia Pacific J Manage (2006) 23: 345–367
DOI 10.1007/s10490-006-9006-3

The impact of participative leadership behavior

on psychological empowerment and organizational
commitment in Chinese state-owned enterprises:
the moderating role of organizational tenure

Xu Huang & Kan Shi & Zhijie Zhang & Yat Lee Cheung

Published online: 8 July 2006

# Springer Science + Business Media, LLC 2006

Abstract We investigated whether participative leadership behavior can produce

psychological empowerment, which in turn, leads to organizational commitment for
employees of Chinese state-owned enterprises. Based on the data collected from 173
employees in two state-owned enterprises, we found that participative leadership
behavior was associated with organizational commitment, but not with all four
dimensions of psychological empowerment, namely, meaning, competence, self-
determination, and impact. Our findings also showed that while participative
leadership behavior tended to make short-tenure employees feel competent and
thus, more committed to an organization, such leadership behavior did not have a
significant impact on competence as well as organizational commitment for long-
tenure employees.

Keywords Empowerment . Participative leadership . Organizational commitment

China’s economic reform has led to a massive influx of foreign investment as well as
Western management ideas and practices, which have become one of the major
factors influencing leadership behavior in Chinese enterprises (Tsui, Wang, Xin,

X. Huang (*)
Department of Management and Marketing, The Hong Kong Polytechnic University,
Hung Hom, Kowloon, Hongkong, People’s Republic of China
e-mail: mshuangx@polyu.edu.hk

K. Shi
Institute of Psychology, Chinese Academy of Sciences, Beijing, People’s Republic of China

Z. Zhang
Department of Psychology, The South -West University, Chongquing,
People’s Republic of China

Y. L. Cheung
School of Business and Administration, The Open University of Hong Kong, Kowloon,
Hongkong, People’s Republic of China
346 X. Huang et al.

Zhang & Fu, 2004b). Participative leadership has been lauded as a way of securing
commitment of employees to organizations in the West (Lashley, 2000; Legge, 1995;
Quinn & Spreitzer, 1997; Shipper & Manz, 1992). In China, this type of leadership
has been adopted not only in Sino-foreign joint ventures (Wang, 1992; Wang &
Satow, 1994) and foreign firms (Scott, Bishop, & Chen, 2003) but also in traditional
Chinese state-owned enterprises, which are increasingly dependent on a highly
committed workforce to cope with the challenges of the competitive market (Chen,
2002; Wang, 1994; Wong, Wong, Hui, & Law, 2001).
However, researchers and practitioners have long remained skeptical about the
applicability of Western participative management practices in the Chinese context
(e.g., Jackson & Bak, 1998; Nevis, 1983; Tsui, Schoonhoven, Meyer, Lau, &
Milkovich, 2004a). Indeed, prior cross-cultural research suggests that participative
leadership does not necessarily lead to favorable work outcomes in countries with a
large power distance culture such as China (cf. Eylon & Au, 1999; Huang & Van de
Vliert, 2003; Robert, Probst, Martocchio, Drasgow, & Lawler, 2000), because, in
these countries, people tend to take for granted the inequality between the powerful
and the powerless (Hofstede, 2001). Especially, studies suggest that employees in
Chinese state-owned enterprises may not appreciate participative leadership
because they have been exposed to authoritarian and command-based leadership
for decades and thus, may have become tolerant or even submissive to such practice
(Schermerhorn & Nyaw, 1990; Scott et al., 2003; Walder, 1986). Consequently, it is
desirable to investigate to what extent participative leadership influences employees
in the unique context of Chinese state-owned enterprises, which are gradually being
transformed to more market-oriented firms.
Recent empirical studies have revealed that, compared with the old generation of
Chinese employees, the new generation are as receptive to Western management
practices as employees in the West (Liu, 2003; King & Bu, 2005). Moreover, studies
conducted in both Western and Chinese contexts show that, when compared with
employees who have worked for a company for a long time, newcomers are more
receptive to participative style of leadership. Such difference could be explained by
the fact that new employees may have greater desires for intrinsically motivating tasks
and the experiences of self-control in the workplace (cf. Cropanzano, James, &
Konovsky, 1993; Helmreich, Sawin, & Carsrud, 1986; March & Simon, 1958; Wright
& Bonett, 2002) and that the relatively new work environment could cause them to
be more optimistic and enthusiastic.(Ashforth, 1989; Ashforth & Saks, 2000; Bauer
& Green, 1998; Cropanzano et al., 1993; Mowday, Steers, & Porter, 1979; Stumpf &
Hartman, 1984; Wang, C. G., 1992). The findings of these various studies highlight
the possibility that the organizational tenure of employees in Chinese state-owned
enterprises is a potential moderator for the effect of participative leadership behavior.
In Western management literature, it has been well established that managers’
participative behavior is likely to produce organizational commitment especially
when such behavior induces the feeling of empowerment or psychological
empowerment among employees (cf. Eisenberger, Fasolo, & Davis-LaMastro,
1990; Kraimer, Seibert, & Liden, 1999; Liden, Wayne, & Sparrowe, 2000).
Psychological empowerment is defined as a form of intrinsic motivation to perform
tasks, manifested in four cognitive dimensions: meaningfulness, competence, choice,
and impact (Spreitzer, 1995; Thomas & Velthouse, 1990). The current study
contributes to the literature by examining whether psychological empowerment is
the intermediate outcome that helps to explain why the participative behavior of
The impact of participative leadership behavior on psychological empowerment and... 347

managers could result in heightened organizational commitment among employees in

Chinese state-owned enterprises as it has been in Western countries. Moreover, we
attempted to explain the observed differential reactions of Chinese employees to
participative leadership behavior by testing the moderating effect of organizational
tenure.
In the following sections, based on the Western literature, we review the theo-
retical links among participative leadership behavior, psychological empowerment,
and organizational commitment, and develop a hypothesis on the mediating effect
of psychological empowerment on the link between participative leadership
behavior and organizational commitment. Next, we discuss the impact of participa-
tive leadership on employees in the Chinese context and the likelihood of finding
evidence to support the above hypothesis in Chinese state-owned enterprises.
Drawing inspiration from recent studies on state-owned enterprises and the liter-
ature on organizational tenure, we develop three additional hypotheses about the
moderating effect of organizational tenure on the link between participative
leadership behavior on one hand, and psychological empowerment and organiza-
tional commitment on the other.

Participative leadership, psychological empowerment,

and organizational commitment

Empowerment is regarded as the central motif of management thought in the 1990s

(Collins, 1999). The literature is teeming with a bewildering variety of conceptions
of empowerment. Empowerment has been equated with delegation and decentral-
ization (Kanter, 1983), quality circles (Barrick & Alexander, 1987), soft HRM
(Legge, 1995), total quality management (TQM) (Knights & McCabe, 1999), partic-
ipative decision-making (Labianca, Gray, & Brass, 2000), employee involvement
(Lashley, 2000), the sharing of information (Randolph, 2000), and self-managed
teams (Sewell, 1998). Lee and Koh (2001) noted that a common feature of these
various conceptions of empowerment is that empowerment is treated as a set of
management practices and manager behaviors.
Breaking away from the above approach to the conceptualization of empower-
ment, some researchers have tended to focus on the psychological state of
subordinates resulting from empowering practices. Conger and Kanungo (1988)
viewed empowerment as a motivational phenomenon. To them, empowerment is a
process of enhancing feelings of self-efficacy. Thomas and Velthouse (1990) went
further to define empowerment as a form of intrinsic motivation to perform tasks,
manifested in four cognitive dimensions: meaningfulness, competence, choice, and
impact. Resting on this conception of empowerment, Spreitzer (1995) developed a
scale to measure the psychological states of empowerment (psychological empow-
erment) or feelings of empowerment in four dimensions: meaning, competence, self-
determination, and impact. Meaning refers to the value of a work goal or purpose,
judged in relation to an individual’s own ideals or standards. Competence, or self-
efficacy, refers to an individual’s belief in his or her capacity to perform activities
with skill. Self-determination refers to an individual’s sense of having a choice in
initiating and regulating actions. Finally, impact refers to the extent to which an
individual can influence strategic, administrative, or operating outcomes at work
(Spreitzer, 1995, pp. 1443–1444).
348 X. Huang et al.

In an attempt to integrate the two approaches, Lee and Koh (2001) argued that
empowering practices and psychological empowerment can be conceived as the
cause of and effect of empowerment, respectively. In the current study, we have
chosen to examine the impact of participative leadership behavior of the immediate
supervisor (one form of empowering practices) on the psychological empowerment
of employees because past studies have suggested that the behavior of supervisors
plays a vital role in providing subordinates with empowering experiences, which
contribute directly to the latter’s feelings of self-worth and sense of self-
determination (Deci, Connell, & Ryan, 1989). Participative leadership aims to
increase the participation of followers by providing them with greater discretion,
attention, influence, support, information, and other resources; and to share the
issue of problem solving with followers by consulting them before making a decision
(Bass, 1990; Nystrom, 1990). Although to the best of our knowledge, no studies have
investigated the link between participative leadership and psychological empower-
ment, some studies have indeed shown that transformational leadership (Kark,
Shamir, & Chen, 2003), high quality leader–member exchanges (Liden et al., 2000),
as well as participative climates and cultures cultivated by leaders (Sparrowe, 1994,
1995; Spreitzer, 1996) are positively associated with psychological empowerment.
These findings strongly suggest that the participative behavior of leaders is likely to
foster feelings of empowerment of employees.
One of the most widely used theoretical frameworks to explain employee com-
mitment to organizations is Hackman and Oldham’s (1976) job characteristics
theory. This line of research focuses on the intrinsically motivating characteristics of
jobs (e.g., Eby, Freeman, Rush, & Lance, 1999; Harrison & Hubbard, 1998; Liden et
al., 2000; Near, 1989; Pearson & Chong, 1997; Steers, 1977). It is assumed that
individuals may develop a sense of competency and self-worth by working in a job
with Bmotivating potentials’’ (Eby et al., 1999). In other words, if the type of work
employees perform inherently possesses certain intrinsically motivating character-
istics, notably skill variety, task identity, task significance, autonomy, and feedback,
employees tend to experience three critical psychological states: meaningfulness,
responsibility, and knowledge of results (Hackman & Oldham, 1976). Research has
shown that these three psychological states are conducive to higher levels of work
motivation and organizational commitment (Eisenberger et al., 1990; Hackman &
Oldham, 1976; Katz, 1964; Pierce, Rubenfeld, & Morgan, 1991; Thomas &
Velthouse, 1990; Van Dyne, Graham, & Dienesch, 1994).
Furthermore, the results of a meta-analysis conducted by Eby et al. (1999)
suggest that intrinsic motivation mediates the link between the participative
leadership behavior of supervisors and the organizational commitment of employ-
ees. In their recent study, Liden et al. (2000) likened the three psychological states
in job characteristics theory with the four dimensions of psychological empower-
ment proposed by Spreitzer (1995) (meaning, competence, self-determination, and
impact). They demonstrated that both job characteristics and quality leader–
member relationships were positively associated with psychological empowerment,
which in turn, was positively related to organizational commitment. Moreover,
Koberg, Boss, Senjem, & Goodman (1999) found, among other things, that leader
approachability (participative leadership style) was positively related to psycholog-
ical empowerment, which led to increased organizational commitment. Finally, it
has been reported that psychological empowerment mediates the link between
participative climates and various work outcomes (Seibert, Silver, & Randolph,
The impact of participative leadership behavior on psychological empowerment and... 349

2004; Sparrowe, 1994). The above-mentioned studies suggest the following

hypothesis:

Hypothesis 1 Psychological empowerment mediates the link between par-

ticipative leadership behavior and organizational commitment.

Although the above hypothesis has been largely supported by accumulating

studies conducted in the Western context, we do not know whether this hypothesis
holds in another cultural context that is substantially different from that of the West.
Specifically, we are interested in finding out whether participative leadership
behavior leads to heightened employee organizational commitment through its
influence on their psychological empowerment in China, especially in Chinese state-
owned enterprises. In Section 2, we describe the cultural context in Chinese state-
owned enterprises and how such cultural context has given rise to more
authoritarian and command-based leadership behaviors, probably resulting in
employees’ reluctance to accept participative leadership behavior. In Section 3, we
discuss the individual differences among employees in Chinese state-owned enter-
prises and try to identify employees who are more receptive to participative
leadership behavior.

Participative leadership in Chinese state-owned enterprises

Since 1978, China’s economic reform has gradually and steadily transformed from a
planned economy to a more market-oriented economy, resulting in an unassailable
annual growth of 10% for more than two decades (World Bank, 2003). One of the
key areas where economic reform took place was in the state-owned enterprises,
which accounted for more than 90% of the industrial output before the reform
(State Statistical Bureau of the People’s Republic of China, 2004; Morris, Sheehan,
& Hassard, 2001). The transformation of state-owned enterprises was further deep-
ened by allowing these enterprises to compete freely in the market in 1997, and by
ending government assistance for loss-making state-owned enterprises in the same
year (Lee, 1999; Sheehan, Morris, & Hassard, 2000). The market-oriented reform of
state-owned enterprises accompanied by the retrenchment of millions of workers
has increased the tension between the management and the employees. It created
uncertainty among employees and weakened morale as well as the commitment of
employees (Cai, 2002; Morris et al., 2001, Weston, 2002). Both market pressure and
changes in employment relationship have created a new challenge to state-owned
enterprises particularly when state-owned enterprises are increasingly dependent on
a highly committed, productive, and innovative workforce to compete in domestic
and international markets. Consequently, a growing number of state-owned enter-
prises have adopted Western management practices such as human resource
management practices (Lewis, 2003; He, Chen, & Zhang, 2004; Warner, 1997) and
employee involvement programs (Hua, Chin, Sun, & Xu, 2000; Lee, 2004; Noronha,
2002) in order to increase employee commitment and productivity. Also, theorists
and practitioners in China have begun to see participative leadership as an effective
way to secure employee commitment and loyalty (Scott et al., 2003; Tsui et al.,
2004b; Wang, 1994), and that managers in state-owned enterprises have been
350 X. Huang et al.

encouraged to adopt participative leadership (cf. Chen, 2002; Wang, 1994; Wong
et al., 2001).
However, participative leadership is very much a Western management concept
and that such leadership behavior is incompatible with the socio-cultural environ-
ment where Chinese state-owned enterprises operate. Specifically, growing evidence
from cross-cultural research points out that intrinsic task motivation may not have
favorable impacts on employees in countries with a large power distance culture
such as China. In their 49-country study, Huang and Van de Vliert (2003) dis-
covered that the link between intrinsic job characteristics, such as job autonomy,
and job satisfaction, is weaker in large power distance cultures than in small power
distance cultures. This is because, while people in small power distance cultures tend
to value work autonomy and freedom, people in large power distance cultures tend
to take hierarchical inequalities for granted (Aycan, Kanungo, & Sinha, 1999;
Earley & Stubblebine, 1989; Hofstede, 1991; Mak, 1998; Nasierowski & Mikula,
1998). In a similar vein, Eylon and Au (1999) reported that empowering practices
such as open communication and employee participation did not lead to increased
job satisfaction and job performance for people from large power distance cultures.
Rather, their findings showed that people from larger power distance cultures
exhibited higher levels of job performance in less empowered situations. Moreover,
Robert et al. (2000) found that managers’ empowering practices were negatively
associated with job satisfaction in India, which has a large power distance culture.
Furthermore, Nevis (1983) uncovered that in China, economic and social security is
often considered more important to life than freedom and control. There is also
evidence showing that Chinese employees interpret achievement more in terms of
meeting production quotas than getting intrinsic satisfaction (Specter & Solomon,
1990; Stewart & Chong, 1990).
Tsui et al. (2004b) argued that, apart from cultural values, another main force
affecting Chinese leadership behavior is communist ideologies, which emphasize
whole-hearted service to the people, loyalty to the Party and the leader, hard work
and self-sacrifice for the collective interests. Schermerhorn and Nyaw (1990)
observed that, in traditional state-owned enterprises, the administrative structure
and managerial practices that were shaped by the communist ideologies focused on
tight control and were likely to foster unquestioning obedience (Walder, 1986).
Employees working in such organizational context tend to submit to authoritarian
and command-based leadership. Jackson and Bak (1998) went even further to
suggest that management styles favor theory X (McGregor, 1960), which assumes
that workers lack motivation and should be controlled, is more applicable in China
than management styles that favor Theory Y, which assumes that workers are self-
motivated and should be given more freedom and autonomy.
In short, in traditional state-owned enterprises, Chinese work values and
communist traditions have given rise to more authoritarian and command-based
leadership behaviors. Although participative leadership behavior is expected to be
associated with psychological empowerment, which in turn, is associated with
organizational commitment in the West, the above evidence clearly suggests that
participative leadership behavior may not be strongly and positively linked with
psychological empowerment and organizational commitment in China. Yet, this
proposition has not been tested in the Chinese context, especially in state-owned
enterprises. Therefore, we attempted to explore whether Hypothesis 1 would be
supported or not among the employees of Chinese state-owned enterprises.
The impact of participative leadership behavior on psychological empowerment and... 351

Moderating effect of organizational tenure on participative

leadership behavior

In contrast to the above pessimistic views of the applicability of Western man-

agement practices in China, some studies suggested that participative leadership
behavior could produce favorable work outcomes for Chinese employees. For
instance, Xia (1987) found that although participative management practices have
not been widely practised in Chinese organizations, the most satisfied Chinese man-
agers were those who reported more participation in high-level decision making.
Using data collected from 300 Chinese employees, Jamal and Xie (1991) revealed
that the respondents who regarded their supervisors as participative reported to re-
ceive more satisfaction, more job involvement, and less role stress. Similar findings
were also reported in a series of studies conducted by Wang and his associates
(Wang, 1989, 1992, 1994; Wang & Heller, 1993; Wang & Satow, 1994).
One way to address these inconsistent findings is to examine the potential in-
fluence of individual differences among the employees of Chinese state-owned
enterprises (cf. Chen & Francesco, 2000; Lo & Aryee, 2003). Liu (2003) has
observed remarkable differences in work values and attitudes between the old and
the new generations of employees of state-owned enterprises. As a result of life-long
employment, the old generation employees tend to have a strong sense of mutual
obligation with their colleagues and loyalty to the organization while the new
generation employees do not build strong social ties with the organization as they
are usually employed under a more flexible contract-based system. Thus, the
organizational commitment of the old generation employees may be less susceptible
to the behaviors of individual leaders than that of the new generation employees.
Moreover, whereas the old generation employees place more emphasis on
bureaucratic procedures in their daily work, the new generation employees focus
more on self-advancement and flexibility. Compared with the new generation
employees, the old generation employees are also more likely to be influenced by
traditional values and thus, tend to follow rather than question what their leaders
say. As a result, both qualitative (Lewis, 2003) and quantitative studies (King and
Bu, 2005) have consistently suggested that the relatively newly employed employees
in state-owned enterprises are more likely to be receptive to new management
practices such as participative leadership.
Studies on organizational tenure and career development conducted in the West
have also suggested that when compared with long-tenure employees, short-tenure
employees tend to place more value on job complexity (Gould, 1979), autonomy,
task identity (Rabinowitz & Hall, 1981) and the intrinsic characteristics of a job
(Katz, 1978, 1980) because they tend to focus more on developing their own careers
in their organizations (Rhodes, 1983). Short-tenure employees may be more
receptive to the participative behavior of managers since participating in decision-
making processes is likely to satisfy their needs to demonstrate their abilities and
skills, and therefore, creating a good impression to develop their careers (Helmreich
et al., 1986). Moreover, prior studies have revealed that new employees tend to
react more favorably towards various organizational practices in their first few
months with the organizations, which is referred to as the Bhoneymoon period’’
(Cropanzano et al., 1993; Helmreich et al., 1986; Wright & Bonett, 2002). In the
honeymoon period, those newcomers tend to have high levels of motivation to
work, not only because they want to create a good impression but also because they
352 X. Huang et al.

are generally more optimistic and enthusiastic about the new work environment.
They have come to the organization with certain expectations. For example, they
may expect that they can use their abilities and satisfy their needs. However, it has
been well documented that the Bhoneymoon period’’ usually ends within three
months to two years (Bauer & Green, 1998; Cropanzano et al., 1993; Mowday et al.,
1979; Stumpf & Hartman, 1984) as most newcomers would experience difficulties in
fulfilling their expectations after a short period of time (Ashforth, 1989; Ashforth &
Saks, 2000), and lose their initial enthusiasm. Finally, it has been shown that orga-
nizational tenure is a salient factor influencing how employees react to intrinsically
motivating tasks and jobs in the Chinese society. In a survey of 546 graduates in
Taiwan, Wang (Wang, C. G., 1992) found that in an organization, Chinese new-
comers tended to attach considerable importance to whether the job could provide
an opportunity to utilize their skills and lead to a sense of achievement, personal
growth, and self-actualization. However, after having joined the organization
for more than three years, these employees tended to shift their concerns to the
fulfillment of their social and family goals, which are highly valued in the society
(Hui & Tan, 1996; Nevis, 1983). Hence, participative leadership, which can be seen
as an opportunity for employees to utilize their skills and demonstrate their abilities,
may have weaker impact on the psychological empowerment of Chinese employees
with longer tenure.
All in all, the above evidence appears to indicate that the organizational tenure of
employees may be a potential moderator of the effect of participative leadership
behavior on psychological empowerment and organizational commitment. As stated
in Hypothesis 1, psychological empowerment is expected to mediate the link be-
tween participative leadership behavior and organizational commitment (Eby et al.,
1999; Liden et al., 2000; Koberg et al., 1999; Seibert et al., 2004). Extending this
logic, we postulate that the interaction between participative leadership behavior
and organizational tenure does not directly influence organizational commitment.
Rather, psychological empowerment mediates the interactive effect of participative
leadership behavior and organizational tenure on organizational commitment.
Specifically, on the basis of the above rationales, we posit that because short-
tenure employees (who approximately joined the company after 1997 when the
state-owned enterprises were transformed to market-oriented firms) tend to be less
influenced by traditional leadership behavior in state-owned enterprises, place more
value on intrinsically motivating work and possess a more optimistic and enthu-
siastic attitude towards the organization, they are more receptive to the participative
behavior of managers, and thus, are more likely to feel empowered. The
psychological empowerment of employees is then translated into organizational
commitment. However, since long-tenure employees (who joined the state-owned
enterprises in or before 1997) tend to be more submissive to an authoritarian and
command-based leadership, more indifferent and resistant towards challenging work
and possess a less optimistic and enthusiastic attitude towards the organization,
participative leadership behavior may not arouse much feeling of empowerment for
them, resulting in a relatively low level of commitment. Taking all of the above
arguments into consideration, we expect that:

Hypothesis 2 The positive link between participative leadership behavior and

psychological empowerment is weaker for long-tenure employees than that for short-
tenure employees in Chinese state-owned enterprises.
The impact of participative leadership behavior on psychological empowerment and... 353

Hypothesis 3 The positive link between participative leadership behavior and

organizational commitment is weaker for long-tenure employees than that for short-
tenure employees in Chinese state-owned enterprises.
Hypothesis 4 Psychological empowerment mediates the interactive effect of
participative leadership behavior and organizational tenure on organizational
commitment in Chinese state-owned enterprises.

Method

Sample and procedures

The sample in this study included 173 employees of two Chinese state-owned
enterprises. Company A was a state-owned motorcycle manufacturing firm located
in Sichuan province while Company B was a state-owned textile manufacturing firm
in Hebei province. The surveys were conducted in January 2003. While question-
naires were administered to the employees by the managers in Company A, the
survey was administered to the employees directly by the researchers after training
workshops held in Company B. Prior to the completion of the survey, the
respondents were assured that their anonymity and the confidentiality of the data
would be respected. Out of 214 questionnaires, 205 were returned, a response rate
of about 96%. However, after deleting the cases whereby organizational tenure was
missing, the size of the sample was reduced to 173, with 59 in Company A and 114 in
Company B. The demographic profile of our sample is presented in Table 1.

Measures

Organizational commitment

The eight-item Allen and Meyer (1990) measure was used to assess affective
commitment to the organization. Since one of the eight items, BI think that I could
easily become as attached to another organization as I am to this one.’’ yielded poor

Table 1 Demographic profile of the samples

Company A Company B

Demographic variables N Percent N Percent

Gender
Male 31 52.5 57 50
Female 25 42.4 57 50
Education
University 13 22 15 13.2
Non-university 45 76.3 97 85.1
Job level
Supervisors 14 23.7 35 30.7
Non-supervisors 37 62.7 70 61.4
Average age 32.2 26.7
354 X. Huang et al.

correlations with the rest of the items, it was removed from the scale. The remaining
sample items are, BI would be very happy to spend the rest of my career with this
organization’’; BI really feel as if this organization’s problems are my own’’; BI feel
emotionally attached to this organization.’’ The items were rated on a seven-point
Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree) (! = 0.70).

Psychological empowerment

Spreitzer’s (1995) twelve-item seven-point scale was adopted to measure psycho-

logical empowerment (1 = strongly disagree; 7 = strongly agree) with four subscales:
meaning (e.g., BThe work I do is very important to me’’), competence (e.g., BI am
confident about my ability to do my job’’), self-determination (e.g., BI have
significant autonomy in determining how I do my job’’), and impact (e.g., BMy
impact on what happens in my department is large’’). Each subscale consisted of
three items. We conducted confirmatory factor analyses using AMOS 5 to assess the
factor structure of the scale of psychological empowerment. Results of model fit
showed that the four-factor model (GFI = 0.94, CFI = 0.95, TLI = 0.94, RMSEA =
0.05) yielded better fit than the single-factor model (GFI = 0.80, CFI=0.62, TLI =
0.53, RMSEA = 0.14). The alpha coefficients were 0.54 for meaning, 0.68 for
competence, 0.73 for self-determination, and 0.79 for impact.

Organizational tenure

Organizational tenure was assessed with one open-ended question which asked the
respondents the number of years they had worked in their organizations. Tenure
varied from six months to 25 years. The mean tenure was 7.8 years.

Participative leadership behavior

A six-item five-point scale, adopted from the Empowering Leadership Question-

naire developed by Arnold, Arad, Rhoades, and Drasgow (2000), was used to
measure perceived participative leadership behavior (1 = strongly disagree; 5 =
strongly agree). The items are, Bmy boss encourages us to express ideas/suggestions,’’
Bmy boss listens to our ideas and suggestions,’’ Bmy boss uses our suggestions to
make decisions that affect us,’’ Bmy boss gives us a chance to voice our opinions,’’
Bmy boss considers our ideas when he/she disagrees with us,’’ and Bmy boss makes
decisions that are based only on his/her own ideas (reverse).’’ The alpha coefficient
was 0.84.

Control variables

Since prior research has suggested that gender, educational level, job level, and
locus of control (e.g., Koberg et al., 1999; Lee & Koh, 2001; Menon, 2001; Spreitzer,
1995, 1996) may influence the psychological empowerment of employees, we
controlled for the effects of these variables. We used dummy variables to represent
differences in gender (0 = male; 1 = female), educational level (0 = non-university
graduates; 1 = university graduates), and job level (0 = non-supervisors; 1 = supervisors
or managers). Locus of control was assessed using Levenson’s (1981) ten-item scale.
In addition, since age was found to be strongly correlated with tenure (e.g., Hunt &
The impact of participative leadership behavior on psychological empowerment and... 355

Saul, 1975; Morrow & McElroy, 1987; White & Spector, 1987), we controlled for
age, which was measured in number of years. Finally, we controlled for any differ-
ences in organizational context between the two firms using a dummy variable.

Translation

The original questionnaire was in English and was translated from English into
Chinese by a bilingual speaker of Chinese and English. The Chinese questionnaire
was then given to another bilingual speaker to back-translate into English. In cases
where the back-translation was not equivalent to the original version, the process of
translation was repeated.

Testing the mediation model

Baron and Kenny (1986) proposed a three-step procedure to test a mediation

model. First, the independent variables should be significantly related to the medi-
ating variables; second, the independent variables should be related to the
dependent variables; and third, the mediating variables should be related to the
dependent variables with the independent variables controlled for in the model. If
the beta weights of the independent variables are still significant in the last step,
partial mediation is present. If the beta weights of the independent variables are not
significant, full mediation is present. Baron and Kenny (1986) also suggested that
this three-step procedure could be modified to test an interactive mediation model.
Similarly, in the first step, the interactive effects of the independent variables and
the moderator variables on the mediator variables should be significant. In the
second step, the interactive effects of the independent variables and the moderating
variables on the dependent variables should be significant. Lastly, the mediator
variables should be significantly related to the dependent variables, with the
interactive effects of independent variables and moderating variables controlled for.
Complete mediation occurs only when the interactive effects become non-significant
in the third step.

Results

The means, standard deviations, and intercorrelations of all variables are shown in
Table 2. Although participative leadership behavior was significantly related to
organizational commitment and to the meaning dimension of psychological
empowerment, it was not significantly correlated with the other three dimensions
of psychological empowerment. Since the level of participative leadership behavior,
the four dimensions of psychological empowerment, and organizational commit-
ment were rated by the respondents, our results might be affected by common
method errors. Therefore, we conducted a confirmatory factor analysis using AMOS
5 to assess whether these six self-reported variables can be differentiated from each
other. Results of model fit showed that the six-factor model (GFI = 0.90; CFI = 0.91,
TLI = 0.90, RMSEA = 0.06) yielded better fit than the single-factor model (GFI =
0.70; CFI = 0.42, TLI = 0.43, RMSEA = 0.17).
356 X. Huang et al.

Table 2 Means, standard deviations, and intercorrelations of all measures

Measure M SD 1 2 3 4 5 6 7

1. Participative 3.23 0.73 –

leadership
2. Tenure 7.85 5.35 0.02 –
3. Meaning 5.46 0.90 0.16** 0.21** –
4. Competence 5.79 0.87 0.06 0.03 0.29** –
5. Self-determination 4.64 1.26 0.03 0.12 0.24** 0.15 –
6. Impact 3.84 1.23 0.03 0.10 0.38** 0.09 0.48** –
7. Organizational 5.11 0.81 0.29** 0.08 0.56** 0.28** 0.12 0.39** –
commitment

N = 173.
** p < 0.01, two-tailed.

Testing the hypotheses

Hierarchical regression analysis was conducted to test the hypotheses. To test

Hypothesis 1, after entering all of the control variables in Step 1 (see Table 3 Model
1), we regressed the mediating variables (the four dimensions of psychological
empowerment) on the independent variable (participative leadership behavior) in
Step 2. Results indicated that, after controlling for the effects of gender, age,
education level, job level, and locus of control, participative leadership was not
significantly related to any of the dimensions of psychological empowerment. These
findings failed to meet the first requirement of mediation, leading to the rejection of
Hypothesis 1, which states that psychological empowerment mediates the link
between participative leadership behavior and organizational commitment.
We then continued to examine the interactive mediation model. As shown in
Table 3 (Model 1), we entered organizational tenure in Step 3 and the interaction
term of participative leadership behavior and organizational tenure in Step 4.
Having fulfilled the first requirement for interactive mediation, the interactive effect
of participative leadership behavior and organizational tenure on one of the
mediating variables—competence, was statistically significant (b = j0.23, p < 0.01,
$R2 = 0.04 ). Plots of this interactive effect are shown in Fig. 1. To determine
whether the form of the interaction matched with that raised in Hypothesis 2, we
tested the simple slopes of short organizational tenure (one standard deviation
higher) and long organizational tenure (one standard deviation lower). In support of
Hypothesis 2, we found that participative leadership behavior was positively related
to competence for short-tenure employees (simple slope test: b = 0.51, t = 3.26, p <
0.001), yet unrelated to competence for long-tenure employees (simple slope test: " =
j0.16, t = j1.60, n.s.).
As shown in Table 3 Model 2, we found that the interactive effect of participative
leadership behavior and organizational tenure on organizational commitment was
significant (b = j0.18, p < 0.05, $R2 = 0.03), thus, fulfilling the second requirement
for interactive mediation. Plots in Fig. 2 show that participative leadership behavior
was positively related to organizational commitment for short-tenure employees
(simple slope test: b = 0.55, t = 3.77, p < 0.001), yet unrelated to organizational
commitment for long-tenure employees (simple slope test: b = 0.11, t = 3.28, n.s),
providing strong support for Hypothesis 3.
The impact of participative leadership behavior on psychological empowerment and... 357

Table 3 Regression summary for the mediating role of psychological empowerment on the inter-
active effect of participative leadership behavior and organizational tenure on organizational
commitment

Meaning Competence Self-determination Impact Organizational

commitment

Model 1 Model 2 Model 3

1. Company j0.03 j0.20 0.12 0.38** 0.03 j0.02

Gender 0.75 j0.07 0.01 j0.03 0.11 0.10
Age 0.25 0.08 0.08 0.03 j0.09 j0.19
Education j0.14 0.02 0.02 0.15 j0.12 j0.11
Job level 0.03 0.01 0.08 0.00 0.14 0.14
Locus of control 0.25** 0.07 0.06 0.11 0.20* 0.07
$R2 0.15 0.06 0.03 0.10 0.11 0.11
2. Participative 0.15 0.10 j0.02 0.05 0.33*** 0.24**
leadership (P)
$R2 0.01 0.00 0.00 0.00 0.06 0.06
3. Organizational 0.03 j0.11 0.10 0.18 0.15 0.12
tenure (T)
$R2 0.00 0.00 0.00 0.01 0.00 0.00
4. P  T j0.10 j0.23* 0.11 j0.03 j0.18* j0.08
$R2 0.01 0.04 0.01 0.00 0.03 0.03
5. Meaning 0.37***
Competence 0.16**
Self- j0.13
determination
Impact 0.28***
$R2 0.28
Overall model
R2 0.17 0.10 0.04 0.11 0.20 0.48
Adjusted R2 0.11 0.04 0.00 0.05 0.15 0.42
Overall model F 1.393 6.389* 1.395 0.126 4.438* 17.442***

N = 173.
*p < 0.05, **p < 0.01, *** p < 0.001.

Finally, we examined the third requirement for interactive mediation by

regressing the dependent variable on the mediating variable, with the interaction
term of participative leadership behavior and organizational tenure included in the
equation in Model 3. We found that the mediating variable-competence, was
significantly related to the dependent variable-organizational commitment, whereas
the interaction term of participative leadership behavior and organizational tenure
became non-significant, suggesting that competence completely mediated the
interactive effect of participative leadership behavior and organizational tenure on
organizational commitment. Therefore, Hypothesis 4 was partially supported.

Supplementary analyses

As shown in the Method section, the respondents in Company A had higher level of
education and occupied higher level positions than those in Company B, leading to
potentially confounded effect of company context. We therefore repeated the above
358 X. Huang et al.

Competence

Long-Tenure
5
Short-Tenure

4
-1 0 1
Participative leadership

Fig. 1 Tenure moderates the link between participative leadership behavior and competence

testing of the moderating effects in Company A (59 respondents) and Company B

(114 respondents) separately. The analysis on the data of Company A revealed a
significant interactive effect of participative leadership and organizational tenure on
competence (b = j0.52, p < 0.05, $R2 = 0.10) and a non-significant interactive effect
on organizational commitment (b = j0.33, p < 0.20, $R2 = 0.04). The analysis on the
data of Company B showed a significant interactive effect of participative leadership
and organizational tenure on both competence (b = j0.27, p < 0.05, $R2 = 0.05) and
organizational commitment (b = j0.21, p < 0.05, $R2 = 0.04). Although the
interactive effect on organizational commitment was not significant in Company A
(which may well be caused by the small sample size), the overall patterns of the
results are similar between the two companies, thus, ruling out the possible
confounded effect of company context.
In addition, the Cronbach’s alpha of the meaning dimension of psychological
empowerment was only 0.54, which is far below the acceptable level of 0.70. After
removing one item, the coefficient went up to 0.68. We then repeated the entire
hypothesis testing using the new scale of meaning, which contained two items only.

5
Organizational commitment

4
Long-Tenure

Short-Tenure
3

2
-1 0 1
Participative leadership

Fig. 2 Tenure moderates the link between participative leadership behavior and organizational
commitment
The impact of participative leadership behavior on psychological empowerment and... 359

We found essentially the same results. Therefore, we concluded that the low alpha
of the meaning dimension did not affect the overall results of this study.
Lastly, to confirm our prediction that employees, who joined the state-owned
enterprises after 1997 when the state-owned enterprises were transformed to
market-oriented firms, tended to react to participative leadership behavior more
positively than those who joined the enterprises before 1997, we split the sample and
computed the intercorrelations among the key variables. We found that participa-
tive leadership was strongly correlated with competence (r = 0.33, p < 0.01) and
organizational commitment (r = 0.39, p < 0.01) for employees who joined the com-
pany after 1997. Yet, participative leadership was not correlated with competence (r =
j0.13, n.s.) and moderately correlated with organizational commitment (r = 0.22,
p < 0.01) for employees who joined the companies in or before 1997.

Discussion

Some researchers maintain that participative leadership may not work effectively in
China, not only because the large power distance culture of China promotes the
virtues of submission, humility, tolerance, and hierarchy (Hofstede, 1991, 2001) but
also because of the influence of Confucians ideology, where leaders are expected to
act as the parent of the group or organization and practise authoritarian control
(Bond, 1996; Hui & Tan, 1996). Moreover, other researchers have contended that
the communist ideologies, which emphasize whole-hearted service to the people,
loyalty to the Party and the leader, hard work and self-sacrifice for the collective
interests, help to foster a more command-based leadership style in Chinese state-
owned enterprises (e.g., Tsui et al., 2004b). Employees in these enterprises tend to
submit to this type of leadership and thus, may not be used to and may be even
unreceptive to participative leadership behavior (Schermerhorn & Nyaw, 1990).
Our results show that the influence of participative leadership behavior on the
employees of Chinese state-owned enterprise is more complex than the above studies
have suggested. In support of the above views, we found that participative leadership
behavior was not associated with all of the dimensions of psychological empower-
ment. However, the analyses revealed that participative leadership behavior was
positively related to the competence dimension of psychological empowerment and
organizational commitment for employees who joined the state-owned enterprises
after 1997, but not for those who joined the companies in or before 1997 or five years
before the data collection (which is the year when the state-owned enterprises were
transformed to market-oriented firms). Most interestingly, we found that competence
completely mediated the interactive effect of participative leadership behavior and
organizational tenure on organizational commitment. In other words, participative
leadership behavior tends to make short-tenure employees feel competent to perform
their tasks and therefore, more committed to their organization. By contrast, partic-
ipative leadership behavior is less likely to produce feelings of competence as well as
organizational commitment for long-tenure employees. This finding is consistent with
the suggestion that the individual characteristics and experiences of employees may
explain the differential reactions of Chinese employees toward new management
practices (Chen & Francesco, 2000; Lo & Aryee, 2003).
Recent empirical studies on the differences between the old and the new
generation employees of state-owned enterprises may help to explain the moder-
360 X. Huang et al.

ating effect of organizational tenure. Specifically, it was discovered that, compared

with the old generation employees of state-owned enterprises, the new generation
employees exhibited a lower level of attachment to the organization and were less
tolerant to bureaucratic control. They focused more on self-enhancement, and
possessed more positive attitudes toward Western management practices (Lewis,
2003; King & Bu, 2005; Liu, 2003).
In addition, in the literature on organizational tenure, there are two dominant
explanations of the moderating effect of organizational tenure: the motivational
explanation and the Bhoneymoon phenomenon.’’ The motivational explanation
refers to the fact that short-tenure employees tend to attach more value to intrinsic
motivation because short-tenure employees are more likely to focus on career
development than their long-tenure counterparts (Gould, 1979; Katz, 1978, 1980;
Rabinowitz & Hall, 1981; Rhodes, 1983). The Bhoneymoon phenomenon’’ refers to
the fact that employees tend to be more optimistic and enthusiastic about their
organizations in the Bhoneymoon period’’ after joining the organization. As a result,
they tend to react to new management practices more positively.
However, we did not obtain strong evidence to support the motivational
explanations in the current study. It is interesting to notice that participative
leadership behavior only affected the competence dimension of psychological
empowerment but not the other three dimensions (meaning, self-determination,
and impact). The results suggest that whereas participative leadership behavior may
help the relatively new employees to build up self-confidence, it does not help to
generate the feeling of doing a meaningful job, having the power of self-deter-
mination in work-related issues, and being able to influence the work environment.
Researchers (Lee & Koh, 2001; Liden et al., 2000) have pointed out that these three
dimensions are equivalent to the three psychological states (meaningfulness, sense
of responsibility, and knowledge of the results) of the intrinsic job characteristics
model proposed by Hackman and Oldham (1976). In other words, participative
leadership seems to be associated with the self-confidence of short-tenure employ-
ees but not with their intrinsic motivation.

Limitations

There are two major caveats. First, the measures of participative leadership be-
havior, psychological empowerment, and organizational commitment were self-
reported raises the general issue of common method variance. However, we believe
that common method biases should not be considered a main problem in the current
study, because: (1) results of a confirmatory factor analysis suggested that these self-
reported variables can be differentiated from each other; (2) results of the
moderating models did show that participative leadership behavior was unrelated
to competence and organizational commitment for long-tenure employees. Second,
although we proposed a process model in which participative leadership behavior
leads to psychological empowerment, which then results in organizational commit-
ment, the relationships found in this study are correlated and provide no evidence of
the direction of the relationships. It may well be the case that organizational
commitment is an antecedent of psychological empowerment and participative
leadership behavior. One possible solution to identifying the causality of the model
for future research is to perform a cross-lagged panel analysis in a longitudinal study
(cf. Bateman & Strasser, 1984).
The impact of participative leadership behavior on psychological empowerment and... 361

Implications for theory and practice

Despite the limitations mentioned above, the results of the current research have
provided several theoretical and practical implications. Recently, House, Hanges,
Javidan, Dorfman, and Gupta (2004) have re-examined the cultural dimension of
power distance and distinguished two types of power distance, the power distance
practice and power distance value. The authors found that across all the 62 nations
they had studied, power distance was Bthe most strongly practiced, yet most strongly
despised, dimension of societal cultures (House et al., 2004: 562)’’. They pointed out
that although there were substantial variations in how power distance was practised
across countries, people from all countries preferred egalitarian power distribution.
Although prior research has shown that participative management practices were
less adopted by the Chinese managers and that Chinese employees were more likely
to tolerate authoritarian leadership (cf. Hofstede, 2001; Xia, 1987; Wang, 1989,
1992), Chinese employees may not be necessarily less receptive to the participative
management practices (Wang, 1989, 1994). In line with this view, our results clearly
show that one way for the managers of state-owned enterprises to raise the sense of
commitment of employees is to adopt a participative leadership style.
Another implication from our study is that it provides evidence, showing that
participative leadership is a more effective way of fostering commitment for short-
tenure employees than for long-tenure employees in Chinese state-owned enter-
prises. Perhaps, in order to secure high levels of commitment from long-tenure
employees, managers should adopt practices that tap the very needs of these
employees. In fact, prior research indicate that long-tenure employees may place
more value on security and stability rather than challenges at work (e.g., Rhodes,
1983). Moreover, it has been suggested that the Chinese employees with longer
tenure tend to focus more on meeting their social and family-related needs (Wang,
1992).
Finally, Tsui et al. (2004a) held that China provides a unique context for re-
searchers to test how Western management theories work in a rapidly changing
transition economy. The present dynamic economic environment has caused state-
owned enterprise employees to exhibit mixed reactions towards Western-type man-
agement practices. However, our results suggest that in the long run, participative
leadership behavior is likely to have positive impacts on employees in these
enterprises.

Implications for future research

We found that although participative leadership was not related to psychological

empowerment, it had a significant impact on organizational commitment (r =
0.29, p < 0.01). It might be the case that participative leadership behavior may
influence employee commitment through intermediate variables other than intrinsic
motivation or psychological empowerment. Indeed, in the literature, two theoretical
models have been used to explain the link between participative leadership behavior
and employees’ work outcomes: the motivational model and the exchange-based
model. The motivational model holds that more opportunity to participate in
decision making provides subordinates with greater intrinsic rewards from work
(Conger & Kanungo, 1988; Thomas & Velthouse, 1990) and higher levels of
psychological empowerment (Spreitzer, 1995), which may result in improved work
362 X. Huang et al.

outcomes. The exchange-based model asserts that since participative leadership

behavior sends a message that the superior has confidence in, and concern and
respect for the subordinates, such leadership behavior is likely to foster higher levels
of trust in the superior (Dirks & Ferrin, 2002: 614). As a result, the subordinates are
likely to reciprocate their superior as well as their organization by exhibiting a
higher level of attitudinal and behavioral work outcomes (e.g., Cohen, 1992; Zallars
& Tepper, 2003). Future research should examine whether such exchange-based
model may explain the impact of participative leadership behavior on employee
work outcomes in the Chinese context.
Some qualitative studies have suggested that employees’ feelings of empower-
ment can be shaped by their past experiences (Foster-Fishman, Salem, Chibnall,
Legler, & Yapchai, 1998; Labianca et al., 2000). In a qualitative study, consistent
with what we found in the current study, Foster-Fishman (1994) found that
compared with short-tenure employees, long-tenure employees were more likely
to resist efforts at empowerment because they had experienced more failures with
management practices aimed at providing employees with more challenging and
intrinsically motivating jobs in the past. When people first join a company, they tend
to hold more positive views of the company and to be more committed to their work
(March & Simon, 1958). Yet, as well documented in the literature, after serving in
an organization for a long period of time and after repeatedly being exposed to
work conditions where their sense of self-control is denied, employees tend to lose
their enthusiasm (Ashforth, 1989; Ashforth & Saks, 2000). Moreover, Schermerhorn
and Nyaw (1990) explicitly pointed out that the organizational structure and
managerial practices in traditional state-owned enterprise were likely to create the
feeling of a lack of control and powerlessness among employees. Therefore,
organizational tenure is perhaps only a proxy of these negative organizational
experiences. Future research should directly measure such experiences in order to
unveil the underlying reasons for the indifference shown by employees towards
empowering practices. Ultimately, employees’ interpretations of and reactions to
empowering practices may be overshadowed by experiences of an inability to
assume a certain amount of control over their own jobs, leading to feelings of
powerlessness (Ashforth, 1989) and helplessness (Martinko & Gardner, 1982). We
suspect that this effect may be particularly strong in the Chinese context because
Chinese employees have been subject to authoritarian management for a long time.
However, such notion of feeling helpless and powerless which drives employees to
be less receptive or even resistant to efforts at empowerment initiated by managers
may not be restricted to the Chinese context. These questions clearly deserve to be
investigated further across different cultures.

Acknowledgement This work has been supported by the Research Grants Councils of the Hong
Kong Special Administrative Region, People’s Republic of China, (Project No: B-Q785) to the first
author.

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The impact of participative leadership behavior on psychological empowerment and... 367

Xu Huang is an associate professor at the Department of Management at the Hong Kong Polytechnic
University. He received his Ph.D. from the University of Groningen. His primary research interests
include cross-cultural organizational psychology, psychological empowerment, organizational justice,
leader-member exchange, and leadership behavior in China.

Kan Shi is a professor at the Institute of Psychology at the Chinese Academy of Sciences. He is also
the director at the Center for the Social and Economic Behaviors of the Institute of Psychology and
the Vice President of Chinese Association of Social Psychology. His research interests are leadership,
competency model, job analysis, organizational culture, subjective well-being, and stress management.

Zhijie Zhang is an associate professor at the Department of Psychology at the Southwest University
(China). He received his Ph.D. from the same university. His primary research interests include cross-
cultural organizational psychology, time orientation, time-related individual difference in leadership
and management.

Yat Lee Cheung is a teaching assistant at the School of Business and Administration at the
Open University of Hong Kong. She received her MA from Lancaster University. She teaches
Organizational Behavior and Management subjects.

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