Cultural differences in leadership in SMEs: new product development in China and Germany

Abstract

The present research examines the effect of national culture on the relationship between leadership behaviour and early- and late-stage activities (initiation and implementation) in the new product development process in SMEs. The research develops and empirically validates a theoretical framework with large-scale survey data from Western Germany and China (represented by the Greater Shanghai business region), two culturally diverse settings. The findings suggest that national culture has a significant moderating impact on the effect of certain antecedents to successful new product development activities: participative leadership is a more important driver of new product development activities in Germany than in China, while consideration and management emphasis affect new product development more in China than in Germany. Moreover, the study indicates that the effects of culture on the relationships examined grow stronger as an organisation’s size decreases. The present research addresses recent calls in the new product development literature to broaden our understanding of cultural dependencies in our theoretical models. The paper concludes by drawing implications for both theory and practice.