The composition of human resources in industrial sites is becoming global. In Korea, too, the proportion of foreign members in all industrial fields and production sites is increasing. This is the reason why an approach that reflects this reality is needed in the basic unit of competitive sources. Competitiveness starts with value creation, and this progresses through field innovation. Through empirical analysis of this study, it was analyzed that South Korea members showed active actions and attitudes in developing, promoting, and realizing ideas when they strongly recognized the real meaning of empowerment given by leaders. On the other hand, it was found that foreign members do not know the meaning of empowerment itself, so they are often unable to play an active role in the development, promotion, and realization of ideas. In fact, it was analyzed that foreign members generally did not experience positive interactions with LMX and were exposed to simple tasks and controls. In other words, they are being discriminated against in terms of communication problems, compensation system, and work environment. In particular, this phenomenon is exacerbated in the case of small and medium-sized enterprises (SMEs). Situational response to foreign workers through improvement of LMX and empowerment should be evaluated as a key management task in a situation where productivity improvement and job unit innovation are urgently needed.
In today’s global competitive market, corporate organizations are expanding their multicultural workforce in response to various needs, such as opening up the labor market, joint ventures, and reducing labor costs. Accordingly, innovation in managerial leadership for members with diverse cultural backgrounds is emphasized, and the recognition of fairness in business management and human resource management recognized by foreign workers as well as domestic workers is a prerequisite for organizational performance. This study set the situational relationship between LMX(Leader-Member eXchange) and empowerment as a research model. LMX has a great effects on the employee motivation and job satisfaction, as previous studies suggest. According to the qualitative characteristics of the interaction that the leader maintains with the members, teamwork is formed and team performance and the degree of individual job performance are determined by LMX.
Developed countries, including Korea, where the price of the factor of labor has risen, employing a large number of foreign workers in industrial fields. In particular, even in Korea with different languages and cultural backgrounds, it is true that foreign workers of various nationalities, including Vietnam, China, and Bangladesh, who have different religions and different languages, are deployed at the production sites. Paradoxically, the expansion of the employment of foreign workers, which was expanded to reduce labor costs for productivity improvement, is becoming an important task for innovation and productivity improvement in the corporate field. Nevertheless, it is true that, although academia and industry have a lot of interest in labor control, research and holistic efforts have been lacking on their job satisfaction and motivation. This study intends to analyze the situational relationship between on-site leadership and empowerment to improve this situation.
It is true that there are not many comparative studies targeting organizations that maintain a multicultural workforce. Therefore, this study intends to analyze the causal structure of LMX and empowerment through comparative analysis of the situational relationship between LMX and empowerment between South Korea and multicultural members in a corporate organization. Through this, it is intended to diagnose the mediating effect of empowerment perceived by foreign members and present the current status and management importance of LMX related to empowerment.
2. Theoretical Considerations
2.1 The concept of Leader-Member Exchange(LMX)
The leader-member exchange relationship is defined as the degree of individual exchange between the leader and members. Existing leadership studies have investigated whether individual characteristics such as the leader’s behavioral characteristics or style effectively work in different situations. However, LMX pays more attention to the horizontal interrelationship between the leader and members rather than the vertical authority relation between the leader and members(Kim, et al, 2009). LMX focuses on the formal and informal interactions between the leader and subordinates rather than the individual behavior or personality of the leader. Members who maintain a close relationship with the leader gain trust, help, and support from the leader and provide commitment and loyalty to the organization.
In the initial stage of LMX formation, clear relationship setting should be prioritized, and leaders need trust in the members’ successful performance, ability, and wisdom, and members need confidence to receive valuable rewards and trust from the leader(Han & Ko, 2009). Members of so-called outgroups who do not form close relationships with their leaders have limited interactions with normal business relationships and have fewer opportunities to receive rewards. Therefore, the leader has a close relationship with the members of the in-group, but only interacts formally and formally with the members of the out-group(Liden et al, 1993).
In previous studies on the LMX theory, it is known that members of the so-called ingroup show high performance. A high level of LMX has a positive effect on job evaluation, promotion opportunities, organizational contribution, interest and consideration, and job attitude(Graen & Uhl-Bien, 1995). Tyler & Lind(1992) argued that an individual’s social interaction arises in the process of pursuing his or her own profit, and that the interaction is maintained only to the extent that the cost they pay does not exceed the profit. Even in power theory(Spreitzer & Doneson, 2005), interactions between individuals establish a social exchange relationship. Tekleab et al.(2005) also show that leaders provide important values and resources to members to achieve desirable behavior and performance as members. Prasad(2001) stated that leadership is formed under these situational conditions.
Because leadership is based on the situational relationship between the leader and the interacting members, effective and ineffective leadership is possible according to each situational condition, not all members(Prasad, 2001). In summary, LMX reflects the individual situational relationship between the leader and members, and conceptualizes the interrelationship between the leader and members.
2.2 Situational Relationship around the LMX
Previous studies have revealed that the human relationship between the leader and the members, that is, leadership and job attitudes and behaviors of the members have a great influence on productivity. Of particular note are the in-group and out-group concepts. In-group members are given information acquisition, autonomy, and participation in decisionmaking, which has a very important effect on their job performance. Therefore, in-group members record higher job satisfaction and performance, and trust between the leader and members increases. When the quality of communication is improved, positive performance is improved from the organizational point of view. On the other hand, for out-group members, the leader only assumes the role of a simple manager, so the relationship between the leader and the members is limited to control and supervision (Mueeler & Lee, 2002). As a result, outgroup members will show minimal performance. Day & Crain (1992) Emotional and emotional factors between SMS leader and members influence, Krishnan (2005) transformative leadership, Tangirala et al. (2007) leader’s resources and information, Van Gils et al., (2010) said that the leader’s trust, Srivastava, et. al(2006) had a commonality between members and leaders, and Henderson et al. (2009) said that the level of organizational resources had a positive effect. Regarding the phenomenon induced by LMX, previous studies have reported that it affects the job attitude, job satisfaction, organizational commitment, and turnover intention of employees. Basu & Green (1997) suggest that high LMX promotes members’ innovative behavior, and Gerstner & Day (1997) suggests that LMX has a close relationship with member performance improvement. Basu & Green (1997) said that LMX increases the innovation behavior of members, and Kinicki & Vecchio (1994) suggested the relationship between LMX and organizational commitment. Zhang & Bartol(2010) study that LMX has a positive effect on empowerment, and that empowerment plays a mediating role in the relationship between LMX and turnover intention and job performance.
LMX is generally known to include things such as mutual trust, respect, affection, support, etc(Byun & Ko, 2012). However, it also includes individual characteristics of leaders and members, such as tolerance for negotiation, increased influence, and shared values(Walumbwa, et al, 2009). Dienesch & Liden(1996) subdivided the components of LMX into emotional intimacy, loyalty, contribution, and respect for professionalism. Emotional intimacy (Janssen & Van, 2004) is the degree of personal emotion and attraction formed between a leader and a member, and is expressed as a value separate from the official job. Loyalty is expressed to the extent that leaders and members openly support each other’s actions and characteristics for their own purposes. Contribution is expressed to the extent that members put additional effort into the leader beyond their formal role. Respect for professionalism is expressed in the trust of members in the leader.
2.3 Mediating Role of Empowerment
Prior researchers have suggested various components of empowerment. Srivastava, et. al.(2006) presented individual influence, self-efficacy, and meaning, and Prasad(2001) classified superiority, meaning, autonomy, and influence. Mills & Ungson(2003) classified influence, ability, meaning, and choice. They argued that LMX had a significant relationship with the innovation behavior of members, and presented the motivating factor of innovation behavior as positive LMX. Spreitzer(1995) conceptualized empowerment as meaning, competence, self-determination, and impact. Spreitzer & Doneson(2005) defined empowerment as the force that motivates a specific person to motivate him/herself, and Cheong & Yammarino(2016) conceptualized it as an emotional motivating process in which power or method is actively exercised. In summary, empowerment can be defined as psychological self-control that actively promotes task performance. Prasad(2001) argued that meaning and selfdetermination promote self-efficacy, and Spreitzer & Doneson(2005) found that empowerment leads to teamwork. Eylon(1998) reported that job characteristics influence empowerment. Basically, organizational culture and organizational structure affect empowerment.
Luthans(2002) emphasized reward system and empowerment, and Bass(1999) presented the relationship between transformational leadership and empowerment. Spreitzer(1996) was presented through demonstration analysis by the relationship between information power and empowerment. Prased(2001) reveals consistent interrelationships of empowerment and organizational culture. This is Cheong, et. Al.(2016) is also confirmed. In addition, Prasad(2001) was said that the impacking and organizational commitment have close relationships. Through this prior research, Janssen, et. al.,(2004) presented the relationship between innovation behavior and impowerment
2.4 LMX, Empowerment and Innovative Behavior
Recently, studies have been published that analyze the antecedent factors of innovation performance from the point of view of cognitive psychology, and in common, motivation, values, and attitudes influence innovation behavior(Scott & Bruce, 1994). King et al.(2002) said that individuals with creativity choose an innovative approach with the expectation of success, and Herman and Reiter-Palmon(2011) argued that the innovative performance of individuals with an improvement focus is high. McCare and John(1992) suggested that the creative personality of members is an important factor influencing the innovative performance of members.
Innovative behavior improves performance through the conscious use of new perspectives, processes and methods(Jassen & Van Yperen, 2004). Researchers represented by Janssen(2000) argued that organizational innovation performance is divided into three dimensions: development, promotion, and implementation of creative ideas. Krueger(2000) also stated that innovation performance includes four dimensions: opportunity discovery, idea formation, idea protection, and idea application. Therefore, in this study, the innovation process is divided into idea development, idea promotion, and idea realization. The development of ideas suggests possible solutions to problems. If members have the ability to create and develop new ideas, it will bring about positive change in the organization. Facilitation is supporting and acknowledging innovative ideas and emphasizing members to participate in innovation activities. Execution of ideas is putting innovation into the process.
3. Research Design and Hypothesis Testing
3.1 Research Model and Hypothesis Setting
The interaction between LMX and empowerment (PE) is not only conceptual, but also empirical, by many researchers such as Spreitzer (1995), Prasad(2001) is being confirmed Therefore, in this study, rather than re-verifying the already confirmed interaction between LMX and empowerment (PE), the perceptual difference and empowerment of LMX perceived by South Korea and foreign members in industrial sites where multicultural human composition with different cultural backgrounds is common. This study aims to analyze the differentiation of companies and comparatively analyze their impact on their innovation behavior. According to Prasad(2008) and Spreitzer & Doneson(2005), a leader’s behavior is affected by various factors even under specific circumstances. It criticizes the assumption that the same leader’s actions have the same effect and influence on all members (Rockstuhl, et al., 2012).
Even if the leader behaves the same, the reaction of the members is different according to the in-group and out-group, and it is also differentiated according to the perception of South Korean and foreigners. This study focuses on this. A research model was presented based on the above forwardlooking studies.
The survey was conducted for 45 days from June 30, 2021 to August 15, 2021. A total of 568 questionnaires were circulated, and 520 questionnaires were recovered. After collecting the questionnaire, to check the validity of the questionnaire, the questionnaire judged to be inappropriate in response was excluded. The standards for which responses are judged to be inappropriate are as follows. First, there were more than 5 unanswered questions. Second, the responses of 10 consecutive questions are the same. Third, the responses of the reversed questions and the general questions are contradictory or the responses are distributed regularly. A total of 520 valid questionnaires were collected by excluding inappropriate questionnaires according to the above criteria. The recovery rate was 95%, and the effectiveness of the questionnaire was 87%. The characteristics of the respondents who participated in this study are as follows <Table 1>.
According to <Table 1>, when looking at the gender of the respondents, most of the respondents were male, but there was no significant difference in the proportion of males and females. There were 308 males, accounting for 59.2%, and 212 females, accounting for 40.8%. In the case of foreign workers, males accounted for a high proportion. This is analyzed as the cause of preference at the production site. In terms of the age of the respondents, the number of employees aged 21-30 was the most, 191, accounting for 36.7%, and there were 168 employees aged 31-40, accounting for 32.3%. In the case of foreign workers, the majority were in their 20s. In terms of tenure, there were 120 employees with 1–3 years of service, accounting for 23.1%, and those with 4–10 years of service accounted for 38.7% (201), the most. There were 123 employees of 11-20 years, accounting for 23.7%, and there were 76 employees of 20 years or more, accounting for 14.6%. In the case of foreign workers, the length of service of less than 3 years is the highest, so it is analyzed that the temporary contract type is common. In particular, in the case of foreign workers, most of them are engaged in general manufacturing companies and agricultural and livestock industries, so it is analyzed that they are field workers centered on manual labor.
In the South Korea corporate culture environment, managers have more trust and support for South Korea members than foreigners. This is a global phenomenon. Juk managers approach the South Korea group as an in-group and form a high level of LMX (Rockstuhl, et al., 2012). On the other hand, foreign members are provided with limited information exchange, financial and non-financial support, and opportunities to grow in the organization are limited. This is because it is fundamentally difficult to achieve mutual trust, respect, and common goals due to the possibility of job change and the difficulty of long-term tenure. Nevertheless, in the reality that multicultural members are increasing, their innovative behavior is very necessary, and it is also important that ingrouping them can have a positive effect on productivity and innovation behavior. The important thing is to form a high-level LMX with them to manage innovation behavior and job satisfaction. This is because a high level of LMX increases the enthusiasm of its members for performance and innovation(Day, 2014). Therefore, this study presented the following hypotheses.
Hypothesis 1: Leader-subordinate exchange relationship (LMX) and members’ innovative behaviors will have differences in the meaningmediating effect of empowerment according to the characteristics of members.
Hypothesis 2: Leader-subordinate exchange relationship (LMX) and members’ innovative behaviors will have differences in the competence-mediating effect of empowerment according to the characteristics of members.
Hypothesis 3: Leader-subordinate exchange relationship (LMX) and members’ innovative behaviors will have different effects on the mediating effect of empowerment’s self-determination power according to the characteristics of members.
Hypothesis 4: Leader-subordinate exchange relationship (LMX) and members’ innovative behaviors will have different influence mediating effects of empowerment according to members’ characteristics.
The parameter measurement of LMX was adopted in this study because the items applied in the study of Graen & Uhl (1995) are recognized for their reliability and validity both at home and abroad. For measurement, Likert’s five-point scale was applied. The measurement items are as follows.
For conceptualization and measurement of empowerment, the operational definition and measurement items presented in the study of Spreitzer (1995) are cited. In this study, it was measured using the 12-item scale. The measurement items are as follows.
Innovation behavior is the process of developing, introducing, applying, and disseminating ideas for performance improvement(Janssen, 2000) and implementing them. Accordingly, Janssen(2000) defined it as the efforts of members to comprehensively create, spread, and realize ideas for innovation. Therefore, in this study, idea development, idea promotion, and idea realization were measured.
The innovative behavior of employees is the variable of consciously developing, accepting, and implementing new ideas in a job role or team or organization in order to improve the job performance of an individual, team, or organization(Janssen, 2000) Yang & Yperen(2004) study highlights three important innovative behavior : idea development, idea promotion, and idea implementation. In this study, measurement tool developed by Janssen (2000) was used. This measurement tool consists of 9 items and is a self-reporting measurement tool. Herman. et. al.,(2011) argued that the reason why self-assessment of such innovative behavior is valuable is that members’ perception and reporting of their innovation performance is how they react in consideration of their special history and environmental factors in their job activities.
In this measure, there are three sub-dimensions: idea development, idea promotion, and idea execution. Janssen(2000) found that the correlation between these three sub-factors was too high, and suggested that it would be better to use this measurement tool as a single-dimensional measurement tool. Therefore, in this study, the measuring tool developed by Janssen(2000) was used as a single-dimensional measuring tool. <Table 5> shows the items for measuring innovation performance.
As a result of performing orthogonal rotation, the KMO values for the variables were 0.962, 0.891, and 0.948, respectively, exceeding the 0.6 standard, and the cumulative value of the dividing explanatory power was Meaningfulness(47.637), Competency (21.436), Self-determination(12.087), Influence(6.578), Idea Development (34.882), Promotion of ideas (15.819), Realization of ideas(14.399), LMX(62.418) were analyzed to confirm the validity of factor analysis. Reliability was also confirmed as all variables exceeded Cronbach’s Alpha 0.7 in reliability analysis. Confirmatory factor analysis was performed with the results obtained through exploratory factor analysis on variables. Confirmatory factor analysis is a technique analyzed by the AMOS23.0 program for analyzing structural equation modeling(SEM). Concentrated validity and discriminant validity are mainly dealt with as methods of confirmatory factor analysis, which correspond to conceptual validity. First, convergent validity is also referred to as convergent validity, and it means that the correlation between the measured values must be high if various methods are used to measure one construct. have. That is, it is to verify to what extent a plurality of items measuring the same concept agree.
There are several criteria for judging the presence or absence of convergent validity, and in this study, it is verified based on the Construct Reliability(CR) value. Second, discriminant validity means that the correlation between the measured values obtained by measuring different constructs should be low, which means that the correlation between latent variables should be low. That is, the clear difference here is based on the value of the correlation coefficient, and it can be said that discriminant validity is secured only when the correlation between one variable and the other is low. There are several criteria for securing discriminant validity. In this study, an evaluation method through Average Variance Extracted(AVE) was used. As a result of the analysis, Critical Ratio was Meaningfulness(0.934), Competency(0.937), Self-determination(0.864), Influence(0.846), Idea Development(0.885), Promotion of ideas(0.925), Realization of ideas(0.919) and LMX(0.933) were analyzed to confirm statistical significance in the confirmatory factor analysis.
Meanwhile, in this study, the fitness index of the model was checked to verify whether the research model was suitable. Suitable indicators for confirmatory factor analysis include Χ2 statistics, GFI, AGFI, RMSEA, CFI, and NFI. The values required for conformity analysis are as follows<Table 6>. Looking at the results shown in <Table 6>, all variables meet the criteria for fitness as a research model. Among them, it is determined that the X2/df value, the RMSEA value, the GFI value, the RMR value, the NFI value, the IFI value, and the CFI value are Although the AGFI value does not meet the good judgment criteria, it is judged that it is acceptable because all of the AGFI values meet the acceptable criteria. Through the above analysis, it was confirmed that it is reasonable and reliable to proceed with the analysis with the model of this study through the overall confirmatory factor analysis of all variables.
3.2 Hypothesis Testing
SPSS 24.0 was used to verify the mediating effect of empowerment on the relationship between LMX and members’ innovative behavior in the hypothesis established in this study. Prior to empirical analysis for hypothesis testing, reliability analysis and factor analysis were performed to review the suitability of the measurement tool. <Table 5> shows the progress of exploratory factor analysis and reliability analysis on variables. The results of analyzing the mediating effect of empowerment semantics in the causal structure between LMX and innovation behavior are as follows <Table 6>.
In the analysis targeting South Korean, the mediating effect of the meaning of empowerment on the innovation behavior of members in the order of idea development > idea promotion > idea realization was analyzed. On the other hand, in the foreign group, the mediating effect of the meaning of empowerment on the development, promotion, and realization of ideas was analyzed to have no statistical significance. These analysis results suggest the following implications.
First, in the case of South Korea members, if they strongly recognize the practical meaning of empowerment in the relationship between leaders and members, they have active actions and attitudes in the development, promotion, and realization of ideas. Second, in the case of foreign members, it was analyzed that the meaning of empowerment did not exert the mediating effect function that was positive for the innovative behavior of foreign members, that is, the development, promotion and realization of ideas. This result is interpreted as a result of having a passive and passive task performance and reactive job satisfaction in this situation with foreign members not experiencing positive interaction with LMX and at the same time having a low level of empowerment.
In the analysis targeting South Korean, the mediating effect of the perception of empowerment on the innovation behavior of members in the order of idea development > idea promotion > idea realization was analyzed. The same mediating effect was analyzed in competency recognition as in semanticity. In the foreign group, the mediating effect of empowerment perception on idea development, publicity, and realization was analyzed to have no statistical significance. These analysis results suggest the following implications. First, in the case of South Korea members, the group with a strong perception of empowerment in the relationship between leaders and members has active actions and attitudes in the development, promotion, and realization of ideas. Second, in the case of foreign members, they are not strongly aware of the ability of empowerment itself under LMX. Accordingly, they judge their role within the organization as passive and limited work performance, that is, simple work, repetitive work, etc. In other words, it is perceived as a discriminatory job performance environment. In the South Korea context, foreign members themselves define their roles as passive and passive roles.
In the analysis targeting South Korean, the mediating effect of empowerment’s self-determination awareness on the innovation behavior of members was analyzed in the order of idea development > idea promotion > idea realization. The same mediating effect was analyzed in the order of the members’ self-determination recognition, such as meaning and capacity recognition. On the other hand, in the foreign group, the mediating effect of self-determination awareness of empowerment on idea development, publicity, and realization was analyzed to have no statistical significance. These analysis results suggest the following implications.
First, in the case of South Korea members, it is evaluated that they actively engage in innovative actions on their own if they perceive that the leader gives authority to the members in the relationship between the leader and the members. A group that recognizes that they have the authority to take the initiative in developing, promoting and implementing. This supports the analysis results confirmed in the previous studies of empowerment. Second, in the case of foreign members, it was analyzed that they did not recognize the self-determination of empowerment itself under LMX. It is possible to infer the psychological state of being treated unequal in terms of language communication problems, a pay system differentiated from that of South Korea workers, and the quality of work. Accordingly, it can be said that the focus is not on the overall view of the organization and department and interest and enthusiasm for performance, but rather on the achievement of limited personal performance focusing on the achievement of assigned work goals.
In the analysis targeting South Korean, the mediating effect on the innovation behavior of members was analyzed in the order of idea development > idea promotion > idea realization, etc. The stronger the influence perceived by members, such as meaning, capacity recognition, and self-determination, the stronger the mediating effect on innovation behavior. On the other hand, in the foreign group, the mediating effect of perception of empowerment on idea development, promotion, and realization was analyzed to have no statistical significance. These analysis results suggest the following implications. First, in the case of South Korea members, if they realize that they have a strong influence on job performance and task activities in the relationship between leaders and members, it is evaluated that they actively engage in innovative actions on their own. As the protagonist of the organization, he or she develops the initiative to carry out the task. This also supports the analysis results confirmed in the previous studies of algebra on the influence. Second, in the case of foreign members, they think that they do not have the influence of empowerment themselves. This is because it is difficult to recognize a sense of belonging and commitment to the organization in the absence of regular working conditions. This is because most foreign members work in fixed-term jobs. In the fixed-term working conditions, there is no room for intervention in innovation behavior and collective performance because the achievement of assigned work goals is a priority.
Through the empirical analysis of this study, it was analyzed that South Korea members have active actions and attitudes in the development, promotion, and realization of ideas when they strongly recognize the practical significance of the empowerment given by the leader. On the other hand, foreign members are not aware of the meaning of empowerment itself, and as a result, they do not play an active role in the development, promotion and realization of ideas. Foreign members generally do not experience the positive interactions of LMX, and they end up in the rebellion of passive and passive task performers.
While the group with strong perceptions of empowerment’s capacity recognition, self-determination and influence is developing active innovation behavior, foreign members believe that empowerment’s capacity recognition, self-determination and influence do not exist. will be. This means that they are being discriminated against in terms of language communication, remuneration system, and work environment. In the case of small and medium-sized enterprises(SMEs) and agricultural and fishery-related companies, it is a reality in Korea that a significant number of foreign members are put into production. In a situation where productivity improvement and job unit innovation are urgently needed in the field, the situational response of LMX and empowerment to foreign employees should be evaluated as a key management task.