Performance Evaluation and Plant Level Investment in Environment and Safety Practices: The Moderating Effect of National Culture

This study uses data from a total of 1453 plants in 24 countries and tests for the moderating influence of seven of the national cultural characteristics developed through the GLOBE studies on investment at the plant level in Environment and Safety Practice (ESP). Specifically, we use the plant-level relationship between the evaluation of environmental and safety performance by senior management (EES) and investment in ESP to test for this moderation effect. The results show that four of the seven national cultural characteristics tested (Uncertainty Avoidance (UA), In-Group Collectivism (CG), Future Orientation (FO) and Performance Orientation (PO)) alter investment in this area away from an expected “rational” response. The contribution of this study is that although earlier studies have shown some effect on investment priorities for a single national cultural characteristic, or for a single or limited group of countries, this study provides strong evidence based on seven separate cultural factors using a sample drawn from 24 countries. The results indicate that when this diversion from the “rational” response is positive it is likely to be due to sensitivity to the focus of senior management (UA and PO) rather than a stronger commitment per se to ESP. When the divergence is negative it is when familial groups and local coalitions are powerful (CG) or where the focus is on future outcomes rather than current actions (FO). This latter finding is of particular interest as it is counter-intuitive and indicates that although a high FO culture may be consistent with high investment in ESP, FO itself reduces likelihood of investment at the plant level when senior management focus on this objective increases. Further to this there is no moderating effect recorded for Institutional Collectivism (IC) or Humane Orientation (HO) both of which (similar to FO) are intuitively consistent with values supporting investment in ESP. The inherent merits of ESP, therefore, do not seem to be a significant factor as there is no supporting evidence indicating that cultural characteristics that are consistent with an understanding potential benefits have a positive moderating effect. Implications for theory and practice are discussed.