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Abstract

The cultural milieu has a profound influence on employee behaviour in the organisations. In an increasingly diverse workplace and in a more globalised business world, managers, to be effective, need to appreciate behavioural implications of cultural values that employees, organisations, and societies hold. One of the most cited frameworks to understand behaviour of people across the national cultures was proposed by Hofstede (2001). In this paper, we take a look at the behavioural implications in the organisations of power distance (status differences), which is one of the five cultural dimensions in Hofstede's framework. Specifically. we explore the impact of power distance orientation on employee participation, nature of job descriptions, organisational communication and decision-making, discipline and control, deference to senior employees, management development, and organisational structuring and adaptation. We conclude that: (1) employees in a high power distance context are unwilling to participate in decisions and are content with their managers making decisions and giving them instructions, which they follow passively. (2) jobs are narrowly and tightly specified, giving the employees limited discretion. (3) communication takes place vertical downwards, with no or little horizontal communication. Overall communication is anemic. A large communication gap exists between superiors and their subordinates because it is hard for the subordinates to air their views. (4) power distance gives managers unlimited power and control over subordinates. Employees, in turn, have an unquestioning, submissive attitude. (5) older and senior employees get respect from junior employees not because of former's competence but because of age and long tenure in the organisation. (6) in a high power distance culture, decisions are made by a few at the top autocratically Further, because of little resistance from lower level employees, decisions are made and implemented faster in a high power distance organisation. However, because of lack of input from lower level employees as well as poor communication and information sharing, quality of decisions is poorer in a high power distance organisation. (7) high power distance organisations are prone to unethical behaviour. This is because top managers have not to justify or defend their decisions to lower level employees or to the larger organisation. Unethical behaviour gets covered up or goes undetected. And (8), in a high power distance organisation, managers tend to micromanage and even minor decisions go to the top. Thus, higher level managers are inundated with routine decisions.
CONSEQUENCES OF POWER DISTANCE
ORIENTATION IN ORGANISATIONS
Naresh Khatri
The cultural milieu has a profound influence on employee behaviour in the organisations. In an increasingly
diverse workplace and in a more globalised business world, managers, to be effective, need to appreciate
behavioural implications of cultural values that employees, organisations, and societies hold. One of the
most cited frameworks to understand behaviour of people across the national cultures was proposed by
Hofstede (2001). In this paper, we take a look at the behavioural implications in the organisations of power
distance (status differences), which is one of the five cultural dimensions in Hofstede’s framework. Specifically,
we explore the impact of power distance orientation on employee participation, nature of job descriptions,
organisational communication and decision-making, discipline and control, deference to senior employees,
management development, and organisational structuring and adaptation. We conclude that: (1) employees
in a high power distance context are unwilling to participate in decisions and are content with their managers
making decisions and giving them instructions, which they follow passively. (2) jobs are narrowly and tightly
specified, giving the employees limited discretion. (3) communication takes place vertical downwards, with
no or little horizontal communication. Overall communication is anemic. A large communication gap exists
between superiors and their subordinates because it is hard for the subordinates to air their views. (4) power
distance gives managers unlimited power and control over subordinates. Employees, in turn, have an
unquestioning, submissive attitude. (5) older and senior employees get respect from junior employees not
because of former’s competence but because of age and long tenure in the organisation. (6) in a high power
distance culture, decisions are made by a few at the top autocratically. Further, because of little resistance
from lower level employees, decisions are made and implemented faster in a high power distance organisation.
However, because of lack of input from lower level employees as well as poor communication and information
sharing, quality of decisions is poorer in a high power distance organisation. (7) high power distance
organisations are prone to unethical behaviour. This is because top managers have not to justify or defend
their decisions to lower level employees or to the larger organisation. Unethical behaviour gets covered up
or goes undetected. And (8), in a high power distance organisation, managers tend to micromanage and
even minor decisions go to the top. Thus, higher level managers are inundated with routine decisions.
Key Words: Power Distance, Cultural Dimensions, Organisational Communication,
Micromanagement, Unethical Behaviour, Employee Participation
INTRODUCTION
MANAGEMENT scholars have recognised
socio-cultural environment as one of the most
important factors affecting behaviours of
individuals and groups in the organisations. In an
increasingly diverse workplace and in a more globalised
business world, understanding the ways in which culture
impacts organisational behaviour has become a strategic
necessity rather than mere scientific curiosity (Sagie and
Aycan, 2003).
In the last two decades, the number of studies
examining cross-cultural management issues has grown
exponentially. These studies while documenting some
universality in the management theories developed in the
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2Khatri
West show that organisational behaviour and
effectiveness of management practices vary significantly
from one cultural context to the other. Despite its
limitations, there is perhaps no other contemporary
framework in international management that is so widely
cited as the cultural framework proposed by Hofstede
(1997; 2001). In this paper, the author has synthesised
the findings from a vast array of research studies done
on one of the cultural dimensions, power distance, in
Hofstede’s framework.
Since its publication in 1980, Hofstede’s Culture’s
Consequences (revised and expanded in 2001) has had
a profound influence on the development of cross-
cultural studies within psychology, in organisation
studies, and in the social sciences more generally (Smith,
2002). Hofstede identified five cultural dimensions:
individualism versus collectivism, high versus low
power distance, masculinity versus femininity, strong
versus weak uncertainty avoidance, and long-term versus
short-term orientation. The long-term versus short-term
orientation dimension is also known as Confucian
dynamism. It was added after conducting additional
research (Hofstede and Bond, 1988) using a survey
instrument developed in the Chinese culture. The
individualism-collectivism dimension has received by
far the most attention (Hui and Triandis, 1986; Sinha and
Tripathi, 1994; Triandis, 1995; Schermerham and Bond,
1997; Krokosz-Krynke, 1998). Power distance, which
is perhaps as important a dimension as individualism-
collectivism in the way it influences employee
behaviours and organisational structure and processes,
has attracted relatively much less attention. Several
books and review articles have appeared on the
individualism-collectivism dimension but none we know
of on power distance (e.g., Earley and Gibson, 1998;
Triandis, 1995). In this paper, we attempt to develop a
coherent set of arguments on the behavioural, process,
and structural consequences of power distance in
organisations. By adopting a contingency perspective
(e.g., Sully de Luque and Sommer, 2000), we argue that
organisational behaviour in a high power distance
context will be different from that in a low power distance
context.
Next, we provide a brief definition of power distance
and then develop propositions on its implications for a
number of organisational behaviour issues, followed by
discussion and conclusions.
Hofstede adopted the term ‘power distance’ from the
research done by a Dutch experimental social
psychologist, Mauk Mulder. Mulder’s research (1977)
was based on numerous laboratory and field experiments
with simple social structures. The experiments examined
the emotional distance that separates subordinates from
their bosses. Mulder (1977) defined power distance as
‘the degree of inequality in power between a less
powerful individual and a more powerful other, in which
individual and other belong to the same (loosely or tightly
knit) social system’ (pp.90). Hofstede (1997) extended
Mulder’s notion of power distance from a dyadic, social-
psychological concept to a broader, cultural concept by
defining power distance as ‘the extent to which the less
powerful members of institutions and organisations
within a country expect and accept that power is
distributed unequally’ (pp.28).
In this paper, we subscribe to the view that
individuals and organisations within a national culture
may vary in their value orientations (Earley and Gibson,
1998; Triandis, 1995). That is, although, one may expect
most individuals and organisations in a high power
distance culture to hold high power distance values, it is
possible to find some individuals and organisations that
may not share these values. Much of our treatment of
power distance orientation in this paper is at the
organisational level and we substantiate our arguments
using the findings of studies from various national
cultures which are high on power distance since there is
dearth of studies examining power distance orientation
at the organisational level of analysis. Moreover, we have
used culture and organisation interchangeably as we
believe that organisations like nations have unique
cultures, and, like nations, can be high or low in their
power distance orientation.
Consequences of High Power Distance Orientation
What is most important for me and my department is not
what I do or achieve for the company, but whether the
Master’s favour is bestowed on me…This I have achieved
by saying ‘yes’ to everything the Master says or does…To
Contradict him is to look for another job (Negandhi and
Prasad, 1971, pp. 128).
The above quote captures the essence of the
supervisor-subordinate relationship in a culture
characterised by high power distance (in this case India).
The quote shows the profound influence cultural milieu
can have on employee behaviour. Members of a culture
share certain mindsets that cause them to interpret
situations and events in generally similar ways, while
persons from other cultures and mindsets are likely to
interpret them differently. Culture in this sense is a
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Consequences of Power Distance Orientation in Organisations 3
(1985) note that, in Hong Kong, employees hold high
power distance values and organisations are highly
centralised. Employees, mainly Chinese, are more
satisfied working in a centralised rather than in a
decentralised structure. Since the value governing
hierarchical power relations is the core of the Chinese
culture in Hong Kong, when variations in practices
among the organisations were incongruent with this core
value, employees were dissatisfied. But when value
incongruence involved those values that were not core,
employees’ work satisfaction and performance were not
affected.
Proposition 1a: The amount of employee participation
in an organisation will be inversely related to the
power distance orientation of the organisation.
Proposition 1b: Employees with high power distance
orientation will be more satisfied and productive in
a high power distance organisation than in a low
power distance organisation.
Job Descriptions
Tsui et al., (1995) note that, in highly centralised
organisations, a job-focused employment relationship is
more common. The authors describe job-focused
employment relationship as concerned mainly with
encouraging a high level of task performance from
employees, without requiring their commitment to the
overall organisation’s success. In this relationship, the
expectations of the employer in terms of output required
of the employees are clearly specified. McKenna (1998)
points out that the major managerial concern in a high
power distance organisation is limited to ensuring that
subordinates carry out their jobs exactly the way they are
told, no more and no less.
Proposition 2: Job description will be more tightly
specified in a high power distance organisation than
in a low power distance organisation.
Communication
In organisations operating in a high power distance
cultural milieu, a superior is expected to make decisions
without consulting his or her subordinates, because
subordinates may view their involvement in decisions
by their superiors as a sign of incompetence or weakness
on the part of the superior (Francesco and Chen, 2000).
Subordinates are also unwilling to express their opinions
and disagreements openly due to fear of losing face or
making someone else loses face. Unsurprisingly, such
powerful force that shapes and influences the cognitions
and behaviours of people (Erez, 1994). In this section
of the paper, we would like to examine the implications
of power distance, an important cultural dimension, for
several organisational behaviour issues, such as
employee participation, job descriptions, organisational
communication, decision-making, management control,
ethical behaviour, and organisational structuring and
adaptation.
Employee Participation
Employee participation is the process of giving
employees the authority to make decisions relating to
their work processes and encouraging them to take
responsibilities of their decisions. Most of the research
on employee participation has been done in the West. The
evidence suggests that employees view supervisors who
give them more freedom to do their work more
favourably (Marchese, 2001). However, the influence of
employees’ participation on work outcomes may vary
across cultures (Córdova, 1982). This is especially true
of high and low power distance cultures (Lincoln,
Hanada and Olson, 1981). Studies by Brockner et al.,
(2001) and Gomez, Kirkmann, and Shapiro (1999) show
that employees with high power distance values prefer
lower level of participation as compared to those with
low power distance values. Erez (1994) and Triandis
(1994) suggest that the idea of employee involvement is
somewhat awkward to contemplate and difficult to
implement in a high power distance organisation. This
is perhaps so since employees with high power distance
values are more likely to prefer decisions made by
managers to participatory decision-making; employees
expect to be told what to do and do not like to take on
additional responsibilities. Hofstede (1984) suggests that
members of high power distance cultures (holding high
power distance values) often feel lost in a low power
distance organisation because of the lack of dependable
superiors to give them clear instructions.
Lachman (1988) suggests that early socialisation
affects core values and late socialisation affects only
peripheral values. When faced with pressures to comply
with organisational requirements and managerial
policies, employees’ peripheral values may change while
their core values may not. Holland (1976) also argues
that employees tend to modify organisational role
requirements if they are incongruent with their core
values. In fact, if the role requirements are incompatible
with core values of employees, employees may change
their jobs rather than their values. Birnbaum and Wong
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4Khatri
behaviour results in a major communication gap. Senior
management becomes disconnected from what is
happening at lower levels in the hierarchy and lower
levels employees become uncertain about the
management’s expectation of them (Mintzberg, 1993).
This communication gap may lead to decisions made
based on incomplete and untimely information.
Kim (1999) found that the communication within a
high power distance culture like Korea displays a vertical
pattern. Formal communication is largely top-down,
flowing through the designated pyramidal chain of
command. Also, voluntary feedback from the bottom is
less. In a typical encounter between a superior and
subordinate, a superior does most of the talking and
subordinate merely nods his or her head in affirmation.
Khare (1999) points out that, due to the organisation’s
spatial configuration in Indian organisations (India is a
high power distance culture), the communication
between superiors and subordinates is limited to formal
channels. Moreover, detailed and tight job descriptions
for each employee give rise to a compartmentalisation
of work. This results in few informal interactions
between superiors and subordinates. Hofstede (2001) too
argues that organisations and cultures characterised by
high power distance lack informal communication across
levels in the hierarchy and favour the concentration of
authority and decision-making in a few hands at the top.
Proposition 3: In a high power distance organisation, the
communication gap between superiors and
subordinates will be greater than between superiors
and subordinates in a low power distance
organisation.
DECISION MAKING
Centralisation
Sinha and Tripathi (1994) found autocratic decision-
making in most of the Indian organisations in their study.
In a similar vein, Lachman, Nedd, and Hinings (1995)
argue that decision-making process in high power
distance organisations is one of the non-participative type
and hierarchical. Hofstede (2001) also suggests that, in
high power distance organisations, decision-making
processes are centralised in a few hands and the superiors
are expected to lead and make decisions autocratically.
Proposition 4a: Decision-making process is more
centralised in a high power distance organisation
than in a low power distance organisation.
Decision Formulation
In a high power distance organisation, open challenge
to formal authority is rare as employees have a built-in
sense of legitimacy of superior-subordinate relationship
and a decisive and authoritarian decision maker is
expected (Redding, 1990). This enables top management
to reach decisions much more rapidly since superiors do
not need to consult subordinates for their inputs and
views.
Proposition 4b: Strategic decision-making process in a
high power distance organisation is quicker and
shorter than in a low power distance organisation.
Decision Implementation
Subordinates are generally afraid and unwilling to
express disagreement with their superiors in high power
distance organisations (Hofstede, 2001). They prefer to
work for superiors who make decisions (and take
responsibilities) and then tell them what to do (Erez,
1994; Triandis, 1994). Such an unquestioning attitude
(Graf et al., 1990) of subordinates enables decisions
made by top management to be carried out much faster
in a high power distance organisation than in a low one.
On the other hand, employees in a low power distance
organisation may resist implementation of decisions
which are made without consulting them (Brockner et
al., 2001).
Proposition 4c: The implementation of decisions by top
management is faster in a high power distance
organisation than in low power distance
organisation.
Decision Effectiveness
In a high power distance organisation, the problem of
communication gap between the superiors and the
subordinates as discussed in the previous section tends
to hamper the reaching of effective decisions (Mintzberg,
1993; Khatri, 1996). Senior managers are always ‘right’
even when they are wrong, and usually take it affront
when contradicted (even correctly) by their juniors; and
the best way for employees to survive is to say the
expected thing (Prendergast, 1993). Managers who are
surrounded by ‘yes men’ are unable to benefit from the
diverse perspectives, experience, and knowledge of their
subordinates. Worse still, with stress on conformity, ideas
are unlikely to be refined and improved through group
discussion and debate.
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Consequences of Power Distance Orientation in Organisations 5
Proposition 4d: Quality of decisions in a high power
distance organisation will be poorer than the
decisions in a low power distance organisation.
Management Control
Discipline and control are essential elements of an
organisation, especially the large ones. Nasierowski and
Mikula (1998) note that close supervision may be
accepted (tolerated) by subordinates in a high power
distance organisation. This allows greater control of the
subordinates in a high power distance organisation as
many are afraid to give comments and unwilling to
express disagreements. Further, as discussed above, there
is a much tighter description of working procedures and
rules. This high level of specification of jobs and rules
enables managers to control their subordinates fully
(Krokosz-Krynke, 1998).
Proposition 5: There is greater control over employee
behaviour in a high power distance organisation than
in a low power distance organisation.
Deference to Senior Employees
Kim (1999) argues that the West places more emphasis
on autonomy and equity. The East, on the other hand,
places more emphasis on hierarchical order and in-group
loyalty. Beer and Marsland (1983) suggest that, in a high
power distance organisation, a person gains respect by
virtue of his or her age and position; juniors are expected
to obey and show respect to the seniors. In return the later
display benevolence, generosity and paternalistic care to
the former (Kim, 1999).
Khare (1999) argues that, in Japan, a high power
distance culture, when a new employee starts working
in an organisation, the last thing he or she would think
of is to compete with his or her seniors in the
organisation. His or her thankfulness and respect for the
seniors stops him or her from pursuing his or her own
individualistic goals. As such, competition between
juniors and seniors in Japanese organisations is
uncommon and the senior-junior relations are not easily
interrupted. Similarly, Lockett (1993) states that older
superiors generally receive more respect than younger
ones in a high power distance culture.
Proposition 6: Junior employees show greater respect to
senior employees in a high power distance
organisation than in a low power distance
organisation.
Management Development
Writers on Chinese social psychology and organisational
behaviour (Bond and Hwang, 1993; Redding and Wong,
1993) have highlighted that managers in a high power
distance Chinese culture have a tendency to favour
direction over delegation. Besides, the Chinese managers
are also reluctant in sharing information with their
subordinates (McKenna, 1998). This may inhibit growth
and development of managers and employees in the
organisation.
Walder (1983) argues that top management in
Chinese organisations (mostly high in power distance)
is flexible in the distribution of organisational resources,
largely according to their personal preferences. Similarly,
Kim (1999) argues that promotions in Korean
organisations are usually ‘determined by discriminatory
personal relationship’ (pp.97). Thus, one would expect
opportunities for management development to be limited
to a few favoured by the management.
Proposition 7: The management development
opportunities will be restricted to a favoured few
(elite) in a high power distance organisation than in
a low power distance organisation.
Ethical Behaviour
Nasierowski and Mikula (1998) point out that work
ethics is weak in a high power distance culture. Similarly,
Kedia and Bhagat (1988) argue that it may be difficult
to foster work ethics in a high power distance culture. In
addition, people from high power distance cultures are
more likely to view a questionable business practice more
ethical than people from a low power distance culture
(Cohen, Pant, and Sharp, 1996). In a high power distance
culture, superiors do not have to justify their decisions
to the members lower in hierarchy, which insulates them
from being exposed or reprimanded for wrong doings
(Khatri and Tsang, 2003).
Hofstede’s (1997) description of a power distance
culture suggests that, in a high power distance culture,
the existing power structure and the established
hierarchical order are less likely to subject to challenge.
People in a high power distance culture live with
institutionalised injustice and consider hierarchical order
to be normal and even desirable and accept the
inequalities of power.
La Porta et al., (1997), Husted (1999) and
Lambsdorff (1999) note that hierarchies play part in
corruption. There is considerable dependence of
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6Khatri
subordinates on their superiors in a high power distance
culture. This leaves sizeable room for corruption in the
form of favouritism and nepotism, as decisions are not
made on the basis of merit but favour and loyalty
(Husted, 1999; Khatri, Tsang, and Begley, 2006). Takyi-
Asiedu (1993) found that, in a high power distance
organisation, ‘scandals involving people in authority are,
almost always covered up as long as they remain in
power’ (pp.92). These cover-ups are a result of
subordinates’ loyalty.
Proposition 8: Unethical behaviour will be greater in a
high power distance organisation than in a low power
distance organisation.
ORGANISATIONAL STRUCTURE
Micromanagement
By micromanagement, we mean managerial emphasis on
routine, operational aspects of management at the
expense of broader, strategic management issues. In a
high power distance organisation, there is a tendency in
senior managers to micromanage organisational
activities (Kim, 1999; Redding, 1990). Even relatively
minor and routine decisions are taken to the enterprise’s
top for resolution. This happens because everyone wants
to run things, but does not want the responsibility (Zhou,
1981). A result is that senior managers in a high power
distance organisation find themselves overloaded with
routine decisions, some of which border on triviality
(Lockett, 1993). For example, in a high power distance
culture, it is not uncommon that an expense of a few
dollars goes all the way to the top for approval. Using
Korean organisations as an example, Kim (1999)
highlights that one of the characteristics of Korean
managerial system is its authority structure. It displays
a high concentration of decision-making at the top. The
delegation of authority and empowerment of the middle
and lower levels of management is low.
Proposition 9a: Senior managers in a high power distance
organisation have greater overload of routine
decisions (micromanagement) than their
counterparts in a low power distance organisation.
Differentiation and Integration of Organisational
Activities
A key feature of the high power distance organisation is
the high level of differentiation of activities, in particular
division between staff and line functions (Laaksonen,
1984). Lockett (1993) contends that extensive
differentiation of activities, as in the proliferation of staff
sections, combined with inadequate integrative
mechanisms lead to efficiency problems. The poor
integration in a high power distance organisation occurs
because of anemic communication and low employee
participation as discussed earlier.
Proposition 9b: The differentiation of organisational
activities will be greater in a high power distance
organisation than in a low power distance
organisation.
Proposition 9c: Integration of organisational activities
will be lower in a high power distance organisation
than in a low power distance organisation.
Inertia
In order to be competitive in today’s ever-changing
environment, it is important for an organisation to adapt
to changes in its environment. However, the
centralisation of power in a high power distance
organisation often poses formidable barriers to change
and little incentives for innovation (Hage and Aiken,
1970; Hofstede, 1980; Shane, 1993). Redding and
Baldwin (1991) suggest that high power distance
generally leads to a stable organisational structure, the
subtleties of which are often visible only to its members.
Indeed, because of subordinates’ submissiveness and
unquestioned acceptance of unequal distribution of
power, key personalities who are in control face little or
no threat (Blunt, 1993; Khatri, Tsang, and Begley, 2006).
In other words, stability is ensured through little turnover
of those who are in power.
While centralised control and obedience from
subordinates provide political stability to the
organisation, they also give rise to organisational inertia
(Khatri and Tsang, 2003). Indeed, owing to overemphasis
on conformity and a high level of incompetence, growth
of the organisation and its full potential to adapt to
changes will be restricted. Stress on conformity and
centralised control prevents an organisation from
learning by limiting initiative and innovation from below
(Redding, 1990; Stata, 1989). Information collected by
subordinates who are in touch with the customers,
suppliers and other outside stakeholders may fail to reach
their superiors. Thus, while high power distance serves
to strengthen the grip of a few at the top of the
organisation, it imposes a constraint on the organisation’s
ability to learn and adapt to changes.
Proposition 9d: Organisational inertia will be positively
associated with high power distance.
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Consequences of Power Distance Orientation in Organisations 7
lack of any check or accountability, there is no pressure
on top managers to behave ethically.
Finally, we argued that power distance orientation
affects organisational structure. In a high power distance
organisation, managers tend to micromanage
organisational activities. Even minor decisions go to the
top of the organisation for resolution. Consequently,
higher level managers are inundated with routine
decisions. We also noted that there is a greater
differentiation of organisational activities. However,
because of poor communication, coordination, team
work, and information sharing, integration of
organisational activities is inadequate. Further, because
the top managers want to hold on to the power as long
as they can afford to combined with little resistance from
lower level employees, high power distance
organisations show greater inertia than low power
distance organisations.
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CONCLUSION
In this paper, we have reviewed literature on power
distance orientation and its impact on a variety of
organisational behaviours such as employee
participation, nature of job descriptions, organisational
communication and decision making, discipline and
control, deference to senior employees, management
development, and organisational structure. We have
argued that there will be less employee participation in
a high power distance organisation than in a low power
distance organisation. Employees, in a high power
distance context, over time, develop a mindset of
unwillingness to participate in decisions. They are
content with their managers making decisions and giving
them instructions, which they follow passively. Jobs are
narrowly and tightly specified, giving employees little
discretion. Communication takes place vertically
downwards; informal and horizontal communication is
quite limited. A greater communication gap is likely
between the superiors and their subordinates because it
is very hard for the subordinates to air their views to their
senior managers. On the whole, organisational
communication is quite anemic.
Power distance gives senior managers unlimited
power and control over subordinates. Employees have
an unquestioning, submissive attitude. Older and senior
employees get respect from junior employees not
because of former’s competence but because of their age
and long tenure in the organisation.
Because of the lack of participation of employees in
decision making, in a high power distance culture,
decisions are made by a few at the top autocratically. A
result is that decisions can be arrived at rather quickly.
Further, because of little resistance or questioning from
lower level employees, decisions are implemented faster
in a high power distance organisation than in a low power
distance organisation. However, because of the lack of
input from lower level employees as well as poor
communication and information sharing, quality of
decisions is poor in high power distance organisation
than in a low power distance organisation.
Evidence from empirical studies suggests that high
power distance organisations tend to be indifferent to
unethical behaviour. Top managers have not to justify or
defend their decisions to lower level employees or to the
larger organisation. A result is that they get a certain
amount of immunity; unethical behaviour always gets
covered up or goes undetected because of the loyalty and
submissiveness of the subordinates. Thus, because of
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Naresh Khatri (KhatriN@health.missouri.edu) is a PhD from State University of New York at Buffalo and MBA from Indian Institute
of Management, Ahmedabad. He is an associate professor at the University of Missouri. His research focuses on strategic human resource
management, leadership, healthcare management, strategic decision making and cross-cultural management. He has authored a scholarly
book and published over 40 research articles and book chapters. His research is cited widely by the scholars across the globe. Three of
his research papers have received nominations for the Best Paper Award at the Academy of Management Annual Meetings. He also
received the ‘Teacher of the Year Award’ in the Department of Health Management at the University of Missouri in 2006.
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