Cross-Cultural Leadership Practices and Their Influence on Employee Engagement and OrganizationalEffectiveness in Multinational Firms

Abstract

In multinational companies, the workforce is comprised of people with varying expectations of what it means to be a good leader, but managers seldom have a straightforward model connecting leader behavior to employee and organizational outcomes. This paper explores the relationship between cross-cultural leadership practices (CCL) and employee engagement (EE) and
organizational effectiveness (OE) in multinational organizations, in which cross-cultural leadership practices are conceptualized as culturally intelligent leader behaviours, culturally adaptive leader behaviours and culturally inclusive behaviours. A parsimonious mediation model is proposed whereby CCL increases EE, EE in turn increases OE, and finally, it is assumed that the effect of CCL on OE is a direct effect. The framework is based on research that has been peer reviewed in the fields of cultural gap bridging, expatriate leadership adjustment, cultural intelligence, culture fit and engaging leadership. The analytical procedure consists of scale validation, standardized regression, bootstrap mediation, and cluster comparisons to determine the structural paths. Key findings show cross-cultural leadership practices significantly predict employee engagement (β = 0.47), employee engagement significantly predicts organizational effectiveness (β = 0.31), and the cross-cultural cluster differences between the leadership practices and the effectiveness measure are not statistically significant and the bootstrap indirect effect is 0.14 . It introduces a straightforward framework, a generalizable validation process for the model, and a research roadmap for validating the model with employee surveys in multinational companies with practical implications for leader development and expatriate management.