jurnal manj. budaya

Pergamon S0969-5931 (96)00022--4

International Business Review Vol. 5, No. 5, pp. 469-486, 1996 Copyright © 1996 Elsevier Science Ltd

Printed in Great Britain. All rights reserved 0969-5931/96 $15.00 + 0.00

One Country Many Cultures: Organizational Cultures of Firms

of Different Country Origins Chung-Ming Lau and Hang-Yue Ngo

Department of Management, The Chinese University of Hong Kong, Shatin, Hong Kong

Organizational Cultures of

Firms

Abstract -- This study examines organizational cultures of firms of different country origins in a single country setting. Using the competing values framework and a sample of firms in Hong Kong, the cultural emphases of local Hong Kong Chinese, Mainland Chinese, American, and British firms were compared. It was found that American finns were more developmental and rational, British firms were more hierarchical, whereas Mainland Chinese firms were group- oriented, and local Hong Kong Chinese firms were developmental in nature. Strong relationships between organization cultures and employees' satisfaction and organizational commitment were also confirmed. Copyright © 1996 Elsevier Science Ltd

Key Words -- Organizational Cultures, Hong Kong, National Culture.

Organizational culture has recently received much attention in business practices and academic research (Deal and Kennedy, 1982; Denison, 1990; Peters and Waterman, 1982; Schein, 1992; Smircich, 1983). The study of organizational culture has been approached from a number of perspectives. For instance, some current issues under investigation are: the nature of culture (Schein, 1992; Trice and Beyer, 1984, 1993), ways to study culture (Duncan, 1989; Lau, 1991; Martin, 1992), determinants of organizational culture (Gordon, 1991), managing and changing culture (Fiol, 1991; Kerr and Slocum, 1987; Kilman et al., 1985), and the culture-performance relationship (Cameron and Freeman, 1991; Denison, 1990; Saffold, 1988). However, the issue of how an organization's culture can be measured and the relationship between organizational culture and employees' satisfaction and commitment have not been well explored. To many researchers in international business, the influence of a home country's culture on subsidiary firms' organizational cultures operating in another cultural context is of particular interest.

Hong Kong, being one of the world's largest financial centers and a place where the East meets the West, has been dominated by multi-national corporations (MNCs), in addition to local Chinese firms. A lot of these MNCs are operating with a culture derived from their country of origin. The home country's cultural values have a significant effect on the organizational culture and performance of subsidiaries (Hofstede et al., 1990). In view of the strong influence of the home country's culture on MNCs, studying these firms in Hong Kong provides researchers an excellent opportunity to explore different organizational cultures in a one country setting. In such a way, the effects of

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both local culture and contextual factors (such as labor market conditions and legal environment) are kept constant. This allows researchers to examine the differences in organizational cultures of the MNCs due to different country origins. This approach is able to avoid the folly of assuming one type of organizational culture for all firms operating in a given setting.

In addition, many of these large corporations place strong emphasis on firm performance. Most management people accept the idea that a strong corporate culture (that is a firm dominated by one single culture) leads to higher firm performance (Schein, 1992; Trice and Beyer, 1993). Thus, studying firms of different country origins operating in the same context enables researchers to examine the relationship between different cultures and performance from a new perspective. Specifically, how these organizational cultures influence organization members' attitudes and affective responses are interesting issues that can be addressed in this research design.

A search of academic and business publications database showed that the study of Hong Kong's organizational culture has been very limited. In order to fill this gap, a study was conduc ted to empir ica l ly examine the organizational cultures of firms in Hong Kong. This paper first discusses the current thinking about organizational culture and possible ways to measure cul ture . The re la t ionsh ips be tween d i f ferent nat ional cul tures and organizational cultures are then hypothesized. The results of a recent survey are reported which demonstrates the differences of organizational cultures (measured by the competing values framework at the values and assumptions level as perceived by respondents) between firms of different country origins. The present study also provides evidence of strong relationships between organization cultures and employees ' satisfaction and organizational commitment . Finally, possible management applications and research orientations are discussed.

The Concept of Organizational Culture The construct of organizational culture has been defined in a number of ways. In general, organizational culture is made up of a common understanding and things that are shared among organizational members. These shared things include, but are not limited to, philosophies, ideologies, values, assumptions, expectations, perceptions, norms, sayings, behavior, heroes, and traditions. Martin and Meyerson (1988) summarized all cultural manifestations as practices, artifacts, and content themes.

Pract ices can be def ined as rules, p rocedures , and norms of an organization, and can be either formal or informal. Some people regard an organization's rites, ceremonials, and rituals as organizational culture (Trice and Beyer, 1984). These are often called artifacts (Schein, 1992) and are subject to symbolic interpretations. Some researchers view organizational culture as control and exchange mechanisms (Jones, 1983; Wilkins and Ouchi, 1983) and a source of sustained competitive advantage (Barney, 1986; Fiol, 1991). To other organization scientists, culture is a pattern of basic beliefs, assumptions, and values shared by organizational members (deal and

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Kennedy, 1982; Schein, 1992). These are the content themes to which Martin and Meyerson (1988) refer. Some other content themes are ideational (cognitive) and are usually inferred from interpretations about the meaning of events. Table 1 presents a summary of the current discussion of issues related to research in organizational culture, namely, measuring culture, national and organizational culture, and culture and organizational effectiveness.

Martin (1992) points out that three perspectives are currently employed by researchers to study organizational culture. These three perspectives (integration, differentiation, and fragmentation) differ in their unstated assumptions and hence methods used to study culture. However, Martin (1992) argues that neither of these three perspectives alone is sufficient to explain organizational culture. They are in fact complementary perspectives. Often one perspective's strength is another's weakness. It is useful to understand the differences between the perspectives. Thus, a multi-perspective approach should be adopted to study culture or, at least, acknowledge what is excluded when only one perspective is used. The strength of using a multi-perspective approach in organization studies is obvious. Martin (1992) and Martin and Meyerson (1988) successful ly demonst ra ted the advantages of analyzing an organizat ion using three perspectives together. However, it is not always possible to employ different perspectives simultaneously, especially when a larger sample size is involved. The use of several perspectives concurrently also requires substantial qualitative methods since subjective interpretations are always studied at the individual level.


Firms

Issues Research focus

Measuring culture Levels of culture (Trice and Beyer, 1993) Qualitative approach (Feldman, 1986; Kunda, 1992; Louis, 1985; Van Maanen and Barley, 1984) Quantitative approach (Bernstein and Burke, 1989; Cooke and Rousseau, 1988; Quinne and Spreitzer, 1991)

National culture and organizational culture

Important impact of national culture on organizational culture (Adler and Jelinek, 1986; Doktor, 1990; Hofstede, 1991) Overseas subsidiaries reflect home country's culture (Hofstede et al., 1990; O'Connor, 1995) Single-country vs multiple-country approach (Hofstede et al., 1993)

Organizational culture and effectiveness

Basis for sustainable competitive advantage (Barney, 1986; Fiol, 1991) Critical to developing high performers (O'Reilly, 1989; Sherwood, 1988) Different types of culture leads to different forms of effectiveness (Cameron and Freeman, 199l; Denison, 1990; Lahiry, 1994)

Table 1. Research Issues of

Organizational Culture

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Measuring Culture Based on the above d iscuss ion , we can summar ize the cons t ruc t of organizational culture as consisting of two basic and interrelated components: namely cultural forms and practices (behaviors and norms), and the substance (deeper level bel iefs , values, ideologies , and shared percept ions and interpretations) (Trice and Beyer, 1993). These components represent different levels of culture that are mutually influencing each other and forming shared behaviors, sayings, feelings, and perceptions in organizations. Due to different perspectives employed in studying culture (Martin, 1992) and different emphases on various cultural levels, methods used by cultural researchers also differ.

Louis (1985) proposes that culture can be uncovered by looking for or provoking conditions under which tacit understandings and processes are accessible. Thus, natural and historical incidents in organizations are studied to decipher organizational culture. Feldman (1986) also emphasizes the interpretive aspect of culture and proposed a culture-as-context approach. He argued that culture is context and it is a system of symbols that people use to give meanings to actions. Thus, culture can be studied by looking at those symbols and the roles that these symbols play in organizational actions. Other notable works advocating using an ethnographic approach to study culture are Van Maanen and Barley (1984) and Kunda (1992).

Since artifacts and deeper level values are organizational-level phenomena, it thus follows naturally that organizational culture can be studied at the organizat ional level. For example , Bernstein and Burke (1989) used questionnaires to assess organizational belief systems. Cooke and Rousseau (1988) also used a structured questionnaire to assess the different norms and expectations of different units and levels in an organization. One advantage of using a structured questionnaire is that many more individuals within an organization can be surveyed and the questionnaire can be used across many organizations. This kind of research strategy enables a better generalization of culture findings, due to a large sample. However, the use of a structured questionnaire necessitates the sacrifice of an in-depth understanding of individual interpretations. Nevertheless, it is legitimate to use a quantitative approach which focuses on a specific level of culture with a larger sample size to complement other qualitative and in-depth cultural studies in order to enhance the understanding of organizational cultures.

The use of quan t i t a t ive t echn iques (such as s t ruc tu red survey questionnaires) to assess organizational culture at the organizational level has been supported recent ly by Tucker et al. (1990). They developed an instrument that provides rich information about a firm's culture. This instrument reflects a manager's ability to perceive facets of organizational life and thus can be used to diagnose problems about organizational culture. However , the instrument was not developed with a sound theoret ical framework and has not yet been validated.

Quinn and Spreitzer (1991) reported the psychometr ics of a culture questionnaire developed from the competing values framework (Quinn, 1988)

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and validated in the US context. The competing values framework focuses on competing tensions and conflicts inherent in any human system. When the framework is extended to examine organizational culture, it explores the deep structures and basic assumptions of organizations as perceived by the survey respondents. Four components of organizational culture are measured by this instrument, namely the organization's general cultural characteristics, leadership style, institutional bonding, and strategic emphases. These components represent four types of culture: group culture; developmental culture; hierarchical culture; and rational culture. The survey instrument was used in other studies and demonstrated satisfactory reliability and validity (Yeung et al., 1991; Zammuto and Krakower, 1991).

The four types of culture have different emphases. Group culture has its primary concern with human relations (Denison and Spreitzer, 1991; Quinn and Spreitzer, 1991). It emphasizes flexibility and maintains a primary focus on the internal organization. Developmental culture also emphasizes flexibility and change, but has a primary focus on the external environment. This type of culture concerns growth, resource acquisition, creativity, and adaptation. Rational culture emphasizes productivity, performance, goal fulfilment, and achievement. Hierarchical culture focuses on internal stability, uniformity, coordination, and efficiency. With the aid of a structured Likert- scale questionnaire, researchers are able to measure culture quantitatively at the level of values and assumptions along these four cultural dimensions. The current study employs this method to tap the cognitive understanding of the organizational culture by the individual members being studied.

National Culture and Organizational Culture National culture plays an important role in shaping an organization's culture (Adler and Jelinek, 1986; Doktor, 1990; Hofstede, 1991; Hilman et al., 1985; O'Connor, 1995). Adler and Jelinek (1986) noted that many researchers seem blind to the societal context within which any organization's culture must exist. Management must recognize the national culture within which the organization is embedded and evaluate its impact on the organization. The impact of national culture can be reflected in a number of ways, ranging from the constraints imposed on organizations by the environment within which it must operate to the mentality and habits of organizational members. Rosenzweig and Nohria (1994), for example, found that there were sharp differences in the human resource management practices of US affiliates of Canadian, Japanese, and European MNCs. The strong effect of country of origin culture in human resource management policies was also confirmed in Yuen and Hui's (1993) study of Singaporean subsidiaries of Japanese and American MNCs.

As suggested by Hofstede (1991), the interplay between national culture and organizational culture can be much more complex. Hofstede (1991) argued that national level cultural differences reside mostly in values, less in practices. At the organizational level, however, cultural differences reside mostly in practices, less in values. From an empirical study of twenty units of ten European organizations with similar cultural values, using both qualitative


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and quantitative techniques, Hofstede et al. (1990) showed that there were some relationships between national cultural values and organizational practices, but not all. O'Connor (1995) concluded from investigating the budget participation practices that organization cultures differ across local firms and foreign subsidiaries in Singapore. The organizational culture of a firm is likely to reflect the norms and values associated with the society of the "mother" country.

It is evident from the literature that a home country's culture has influences on the management practices and organizational culture of overseas subsidiaries (Hofstede et al., 1990; O'Connor, 1995; Rosenzweig and Nohria, 1994; Yuen and Hui, 1993). Thus, firms of different country origins operating in a given context will have organizational cultures reflecting the parent company's home cultures. Distinct organizational cultures will be developed in these subsidiaries, with little influence from the host country's culture.

By studying the cultures of organizations in one country setting, a better understanding of the organizational culture of firms from different country origins can be achieved. This method is different from the Hofstede et al. (1990) study in the sense that all employees of the firms under study share the same cultural values. Thus, it is possible to keep the local culture and other institutional factors (such as labor market condition, legal environment, and government policies) constant. Organizational culture is now studied at the ecological level which describes the cultures of firms of the same country origin at an aggregated level (Hofstede et al., 1993). If the sample was drawn from one country, the confounding effects of different country 's (not necessarily ethnic) cultures could be minimized.

A hypothesis along this line is thus developed: Hypothesis 1: The national culture of a MNC firm's country of origin has

influences on the firm's subsidiary operating in another culture. Specifically, using the competing values framework, firms of different

cultural characteristics have organizational cultures represented by group, hierarchical, developmental, or rational values. The cultural characteristics of firms can be classified by using Hofstede's (1984) framework: individualism, power distance, uncertainty avoidance, and masculinity. Thus, we have several hypotheses developed from the first hypothesis.

Hypothesis 1A: American firms which have a high individualistic and masculine orientation are characterized by a rational culture. Hypothesis 1B: Mainland Chinese firms which have a collectivistic and low masculine orientation are characterized by a group culture. Hypothesis 1C: British firms which have a masculine and an individualistic orientation are characterized by a hierarchical culture. Hypothesis 1D: Local Hong Kong firms which have masculine and low uncertainty avoidance orientation are characterized by a developmental culture.

Organizational Culture and Effectiveness An underlying assumption of cultural studies is that there are some relationships between the type of culture and an organization's performance

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or effectiveness (Deal and Kennedy, 1982; Denison, 1990; Saffold, 1988). It has been argued that organizational culture forms the basis for a firm's sustained competitive advantage. A strong fit between strategy and culture is essential to successful strategy implementation (Barney, 1986; Fiol, 1991). In addition, culture is crucial for developing high performers and leads to increased commitment by employees (O'Reilly, 1989; Sherwood, 1988). For example , a h igh -pe r fo rmance h i g h - i n v o l v e m e n t cul ture provides organizational members with shared attitudes toward organization objectives and establishes commitment to corporate values. Organizational culture also serves as a control mechan i sm to guide employees toward desirable behaviors. Thus, it follows that organizational culture is linked to employees' commitment and job satisfaction.

Cameron and Freeman (1991) reported the finding of a relationship between the type of culture and organizational effectiveness. Each culture type was found to be related to certain aspects of organizational effectiveness only. For example, a clan culture (which stresses tradition, trust, and shared values) is more effective than other cultures on human relations issues. A market culture (which emphasizes competition and exchange relationships) is found to be related to resources acquisition. Lahiry (1994) also confirmed the relationships between constructive culture and affective commitment, and passive/defensive culture and continuance commitment. Besides, Denison (1990) suggested a strong relationship between culture and organizational effectiveness, in terms of both financial performance and employees ' satisfaction. Therefore, it is evidenced from the US data that organizational culture is related to organizational effectiveness as measured by various indicators.

Thus, we can argue that organizational cultures that emphasize inter- personal relationships will have positive effects on employees' commitment and job satisfaction (Cameron and Freeman, 1991). Whereas organization cultures that emphasize competition, rules, and procedures would be relatively weak in eliciting employee satisfaction and commitment. Thus, a firm that emphasizes group culture should be able to elicit employees' job satisfaction and commitment. On the other hand, a finn that has less emphasis on group culture but more on other cultures is likely to result in lower employee satisfaction and commitment. Two more hypotheses are then developed.

Hypothesis 2: The group culture of a firm is positively related to job satisfaction and organizational commitment. Hypothesis 3: Finns with strong developmental, hierarchical, or rational cultures have lower employee satisfaction and commitment.

Research Design and Method This study used firms operating in Hong Kong as the target sample. This provides a single country setting to investigate the cultures of firms of different backgrounds. As we intend to study the effects of country origin on a firm's organizational culture, this research design is able to keep the local culture and socio-inst i tut ional factors constant. In addit ion, by using


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respondents of similar background, it allows us to focus solely on the effects of the national cultures of the firm's country origin on a firm's organizational culture. This method is in line with international business research on the effects of the parent firm on MNC subsidiaries.

Research study on Hong Kong's organizational culture is very limited. Most culture-related studies focus on either cultural values or managerial leadership style at the individual level [see for example, Okechuku and Yee (1991); Schermerhorn and Bond (1991)]. In addition, a single perspective is employed. For example, Kirkbride and Shae (1987) compared the mission statements of Hewlett-Packard and the Shui On Group. This was a qualitative study using archival data. This analytic approach is able to portrait the desired dominant culture as stated by top management only. If a firm has more than one culture, or when the intended culture is not strong enough (Martin and Siehl, 1983), then the mission statement would not be sufficient to reveal a firm's culture.

Nyaw (1991) described the culture of a local Chinese printing firm with data from interviews with the firm's founder and the CEO. Lau (1993) reported the culture of several Hong Kong companies through data collected from published secondary sources such as autobiographies, newspaper columns, and company reports. However, with the absence of quantitative organization-wide data, it is not able to provide a complete picture of the firm's culture. Since the above studies are exploratory and descriptive in nature, their contribution is limited to presenting factual information about current organizational cultures of some firms in Hong Kong.

These studies do not discuss the relationships between organizational cultures and other outcome variables, like employees ' satisfaction and commitment. The current study collected organizational culture data through surveys of executives working in different organizations. This approach overcomes the weakness of generalizing cultural data from a few case studies. A large scale survey also allows comprehensive comparative examination of cultures in different organizations.

Survey Design This study used a mail-survey research design. A structured questionnaire was mailed to around 2000 business school graduates of a local university. After deducting incorrect addresses, the effective sample size was 1664. The survey adopted a four-wave mail design. The first and third mailings contained an invitation letter, a questionnaire, and a postage-paid return envelope. The second and fourth mailings were reminder letters only. A total of 772 valid responses was received, representing a response rate of 46.4%.

The sample was composed of MBA graduates and business major undergraduates who had left school between 5 and 15 years before. This was to ensure that the respondents shared similar educat ional and career backgrounds. Seventy-two percent of the respondents were male which corresponded roughly to the proportion of males in the sample. The mean age of respondents was 32.9 with a standard deviation of 4.5 and the mean tenure

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in current company was 5.03 years with a standard deviation of 3"9. All these respondents were Hong Kong born Chinese with very few having had overseas educational experience. This suggested that the respondents were of the same cultural origin and their national cultural values were fairly homogeneous.

The sample organizations were from diversified industries with a median number of employees of 550. The distribution of the industries they represented was: banking and investment (25%); insurance and real estate (14%), wholesale and retail ing (14%); manufactur ing (12%); and transportation and communication (8%). The sample represented the industry structure of the local economy, and thus provided a basis for the reliability of the observations. In terms of capital origins, the major parents of MNCs were also well represented.

The questionnaire consisted of 16 items which measured the four components of culture at the values and assumptions level as suggested by the competing values framework. The items were in a five-point Likert scale format. The questionnaire also included measures for organizational commitment and employee satisfaction. Commitment was tapped by a 16- item instrument which measured both affective commitment and continuance commitment (Allen and Meyer, 1990). Employee satisfaction was measured by a single item question which asked subjects to indicate generally how satisfied they were with their current job.

The respondents were mainly senior and middle-level managers. Given their long tenure and position in respective firms, they should have been able to provide an accurate perception of the firm's organizational culture. The culture instrument was first factor analyzed to see if the four cultural types are valid in this survey. The sample was grouped according to the firms' different country origins. Then, the differences between organizational cultures from different country origins were checked using MANOVA. Regression analysis was also used to determine how cultural types were related to satisfaction and commitment in each country group.

Results A factor analysis of the 16 culture items using principal component analysis resulted in four factors which explained 59.7% of total variances. A closer look at the factor structure indicated that the four cultural types in general were satisfactorily represented. Coefficient alphas of these four cultural measures were as follows: group culture, 0.61; developmental culture, 0.81; hierarchical culture, 0-58; and rational culture, 0-50. Although the coefficients alphas were not as high as those reported in the validation survey which ranged from 0-77 to 0"84 (Quinn and Spreitzer, 1991), the current alphas were still acceptable. Since the instrument has been calidated using multi-trait- multi-method (Quinn and Spreitzer, 1991; Zammuto and Krakower, 1991), it is acceptable to analyze further using the cultural measures.

The sample was re-grouped according to the country origins of respondents' organizations. This resulted in 195 local Hong Kong Chinese


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firms, 47 Mainland China firms, 130 British firms, and 131 US firms. The rest of the respondents were from government, other Asian and European countries, and joint ventures. In order to provide a more powerful test, the home country-culture MANOVA analysis included only firms with single country origin. Thus, this study used a total of 503 cases, excluding those non-single country origin firms.

Table 2 presents the MANOVA results of the four cultural types according to the four country groups. Both univariate Fs and multivariate F indicated that the differences were significant. This demonstrates that firms of different country origins have different cultural emphases. In general, Hypothesis 1 is supported. Multiple comparison test (LSD) was also used to indicate the differences in culture between the country groups.

The data revealed that local Hong Kong Chinese firms have a relatively higher emphasis on both group and developmental cultures. Mainland Chinese (PRC) firms were characterized by group culture. The British firms scored relatively higher in hierarchical culture. For the US firms, both developmental and rational cultures were emphasized. In general, the results supported hypotheses 1A through 1D. It was confirmed that the cultures of these firms were not similar, though they were operating in the same setting. Despite the prediction of just a developmental culture, local Hong Kong Chinese firms scored high in group culture too. American firms, on the other hand, were high in both rational and developmental culture. By and large, these additional cultural emphases were not contradictory to the capital origin's national cultural values.

Table 3 presen ts the r eg ress ion ana lys i s resul t s o f the e f fec t s o f organizat ional cul ture types on ou tcome measures , namely af fec t ive commitment, continuance commitment, and general job satisfaction. Group culture was found to be significantly related to affective commitment and job satisfaction across all country groups. Hypothesis 2 is thus supported.

Hypothesis 3 is only partially supported. As compared to group culture, the other three types of cultural emphases by and large had resulted in lower employee satisfaction and commitment. Although developmental culture had positive effects on affective commitment in American, British, and local Chinese firms, the regression coefficients were smaller than those of group

Table 2. MANOVA Results of Four Cultural Types Across Four Country Groups

Local PRC UK USA Univariate F

Group 12'99a 13"64a 1 l'81b 12"28b 7-34* Developmental 13-21 a 12"09b 11 "72b 13"67a 9"04* Hierarchical 12-07a 13" 19b 13-79b 12"70ab 11-09* Rational 12.89a 11-89b 12"67ab 13"84c 8"76*

n 195 47 130 131

Multivariate F = 10"65", *P < 0.01. Means with the same superscript letter are not significantly different at 0.05 by LSD test.

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Affective Continuance Job Organizational commitment commitment satisfaction Cu l tures o f

Firms A. Local Hong Kong Chinese firms

Group 0"704"* 0" 165"** 0"479"* Developmental 0-188 * * -0" 042 0" 107 Hierarchical -0.093 0.111 0"089 Rational 0.012 0" 128 -0-077

F 61-79"* 4.69** 19.97"* R 2 0.568 0.091 0"296

B. Mainland Chinese (PRC) firms Group 0.509** 0.139 0"586** Developmental 0.016 -0"224 0" 167 Hierarchical -0.150 -0'081 0"007 Rational 0"323* 0'388* 0" 123

F 8"76** 1'43 14"48"* R 2 0"461 0-122 0"580

C. British firms Group 0"372** -0-070 0-411"* Developmental 0"410"* 0-025 0.095 Hierarchical 0-027 0.178"** 0.077 Rational 0.014 0.174 0"087

F 29.26** 2.34 12-99"* R 2 0.484 0.070 0"294

D. US firms Group 0"506** --0.017 0"235** Developmental 0"243** -0.087 0"334** Hierarchical 0.045 -0.029 0.101 Rational -0 '063 -0 .183"* * -0 ' 120

F 18.47"* 1 '95 7"89 R 2 0"372 0"059 0"200

Table 3. Regression Results

of Cultural Types on Commitment and

Satisfaction for Each Country Group

P < 0'05; **P < 0-01; ***P < 0"1.

culture in two of the three cases. Similarly, the same was true for rational culture in Mainland Chinese firms which had a smaller but positive effect. In other cases, rational and hierarchical cultures had no statistically significant effects on both forms of commitment and satisfaction. These cultural emphases did not have a negative effect on commitment and satisfaction, but did not contribute positively either. This supported Hypothesis 3. However, there was evidence that developmental culture and rational culture had a higher positive effect on the outcomes.

For local Chinese firms, developmental culture is significantly related to affective commitment. This is consistent with the MANOVA analysis which indicates that local Chinese firms have an emphasis on developmental culture. This cultural emphasis contributes to employees' affective commitment. This is also true in the case of Mainland Chinese firms and the American firms

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where cultural emphases do lead to affective commitment. In the case of British firms, developmental culture was found to be positively related to affective commitment, in addition to group culture. However, developmental culture was the least emphasized among British firms.

The second ou tcome measure , con t inuance c o m m i t m e n t , was not significantly related to any cultural emphases across all four country groups at the 0.05 level. An exception is the rational culture in Mainland Chinese firms, but the regression model was not significant. However, group culture in local Chinese firms, hierarchical culture in British firms, and rational culture in American firms was significant at the 0"1 level. These significant cultural types have the same emphases in each respective country identified in the MANOVA analysis above.

In the case of job satisfaction, only American firms have a second cultural emphasis (developmental culture) which contributes to overall satisfaction, besides the primary effect of group culture. Developmental culture, but not together with rational culture, was found to be significantly related to job satisfaction in American firms. Group culture was the most influencing variable that explained the variances of job satisfaction, especially among Mainland Chinese firms (r 2 = 0-58).

Discussion This study provided evidence of the feasibility of measuring organizational culture from a structured questionnaire in the local context. The competing values framework was found to be useful in both assessing cultures and examining cultural impacts in organizations. The findings of different cultural emphases among firms of different country origins in Hong Kong illustrated the discriminating power of the instrument.

The differences in cultural types of firms of different country origins reflected differences in value-orientations of the firm's home country's culture. For example, Hong Kong people are low in uncertainty avoidance according to Hofstede's (1984) model and this implies that Hong Kong managers are willing to take risks. This is consistent with the developmental culture which emphasizes flexibility and change. In Mainland Chinese firms, group culture was emphasized. This is in line with the conventional thought about Chinese enterprises which are characterized by human relationships, family sense, and team spirit (Lockett, 1988). The same is true in local Chinese firms where group culture is also dominant. Traditional Chinese culture remains the primary driver in many kinds of managerial behaviors among local Chinese firms (Lau, 1993).

British firms have a hierarchical cultural emphasis. It is often believed that British firms are more bureaucratic than others. For example, Smith (1992) pointed out that British firms are more formalized than Hong Kong firms. The present study confirmed these earlier findings. The American firms were characterized by developmental and rational culture. Hofstede 's study suggested that American firms were low in uncertainty avoidance, high in

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individualism, and high in masculinity. This implies that American firms are more innovat ive , have a growth or ientat ion, and emphas ize personal achievement. This is consistent with the findings of this study.

Within each country, the causes of satisfaction and commitment are basically different, but group culture has a dominating effect on affective commitment and job satisfaction. This is understandable because group culture emphasizes human relations and flexibility. In the case of Hong Kong, local Chinese have a collectivistic orientation (Hofstede, 1984; Leung and Bond, 1989). A culture that fosters mutual respect, acceptance, and caring should be more effective in eliciting affective responses. Thus, group culture is related to affective commitment and job satisfaction.

In this study it was found that each of the four cultural emphases did not have a significant effect on the continuance dimension of commitment . Continuance commitment refers to the commitment based on the costs associated with leaving an organization (Allen and Meyer, 1990). Since culture is the glue that holds organizational members together (Deal and Kennedy, 1982; Schein, 1992), it thus follows that the glue is not strong enough to influence the decision of leaving an organization when economic cost is involved.

It was suggested earlier that culture is a firm's sustained competitive advantage (Barney, 1986; Fiol, 1991), and certain cultural types are related to certain effectiveness outcomes (Cameron and Freeman, 1991). The current study suggests that affective outcomes are generally influenced by group cul ture . The posi t ive e f fec ts of d e v e l o p m e n t a l cu l ture on a f fec t ive c o m m i t m e n t are worth fur ther d iscuss ion. Though the ef fec t size of developmental culture in some cases is smaller than group culture, this cultural emphasis is never theless a contr ibut ing factor to employees ' commitment . Perhaps a culture that emphasizes flexibility and external adaptation matches the core values of Hong Kong Chinese who have a future and growth orientation (Hofstede, 1991; Kirkbride and Shae, 1987). These cultures have an external focus and provide employees with a clear direction. This may increase the satisfaction and commitment of the employees . Nevertheless, other cultural types could have effects on other outcome measures, such as financial or market performance. These outcomes were not measured in the present study.

It is further noted from the findings that there was congruence of cultural emphases and affective commitment in local Chinese, Mainland Chinese, and American firms. For example, local Chinese firms are high in both group and developmental cultures, and these two cultures are significantly related to affective commitment (together explaining 57% of the variances). These firms therefore are more effect ive than others because their specific culture emphases (which can be considered to be their competitive advantage) are related to certain effectiveness outcomes. Comparatively, the hierarchical cultural emphasis of the British firms was neither related to commitment nor satisfaction. This revealed that their cultures are not effective in soliciting employees' affective outcomes.


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Conclusion The current study explored the concept and related issues of organizational culture in Hong Kong. Past research studies of organizational culture in Hong Kong are mostly firm-specific case studies. They revealed rich qualitative information about each firm's culture. However, no empirical generalizations can be made. The current study provides complementary information to those local studies. The cultures of a much larger sample of firms operating in Hong Kong are assessed using survey-type quantitative methods.

First, the present study has found that firms with different country origins adopt different organizational cultures and policies to run their operations, even within the same country. This in general is in line with Hofstede et al. (1990)'s observations that there may be different organizational cultures in organizations of the same or similar national cultures. However, the current study has additionally kept constant the cultural and contextual factors of respondents. Secondly, the regression results suggest that organizational cul tural emphases do not have the same impacts on organiza t ions ' effectiveness. This confirms previous research on the relationships between culture and performance that there is no one universal culture that excels in all settings. Furthermore, group culture was found to be the most important variable in explaining affective outcomes in the Hong Kong setting.

The organization culture instrument based on the competing framework was validated in the current cultural context. The instrument has acceptable reliability and validity in measuring organizational cultures of firms in Hong Kong. Nevertheless, there may exist certain Chinese-specific elements in Hong Kong firms' organizational culture that were not tapped by the present instrument,as suggested by the relatively lower reliability coefficients. One possible future avenue of research is to further validate the instrument by incorporating more Chinese cultural attributes into it. For example, new items which reflect Chinese-specific culture could be added into the instrument, or the competing values framework could be refined with the addition of Chinese values.

In this study, only commitment and job satisfaction were used to examine the effects of cultures on employees. Other outcome variables related to culture are worthy of further study, for example, the differences of turnover intent ions and mot ivat ional s trength across different cultural types (Boyacigiller and Adler, 1991). Furthermore, the effectiveness of human resources practices within each type of culture is also of interest to human resources management researchers and practitioners.

One limitation of this study should be noted. We did not isolate the interaction effect of local culture and national culture in this study. This might be a factor that contributes to the differences of cultural emphases. However, this isolation work requires some methodological breakthrough. Basically, the organization culture is observed from each individual firm. Their cultures are then aggregated into a country origin culture. This would involve an analysis of data from two levels, both firm-level and country-origin (grouped) level. The aggregation may have confounding effects if the firms' cultures are very

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heterogeneous (Hofstede et a l . , 1993). Further, the current study used employees' perceptions of organizations as the principal way to assess organizational culture. Although this is congruent with the interpretive perspective, it nevertheless may represent a biased view of their organizations. Only more work in the future, both quantitative and qualitative, can help to resolve this issue.


Firms

Acknowledgements -- The financial support of UGC Direct Grant of the Chinese University of Hong Kong for this project is acknowledged. An earlier version of this paper was presented at the Academy of Management Meetings, Vancouver, Canada, 1995. The authors would like to thank the two anonymous reviewers for their helpful comments.

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Received January 1995 Revised February and March 1996

Appendix

Organizational Culture Measures Group culture:

• My company is a very personal place. • My head of the company is generally considered to be a mentor, a sage, or a father

figure. • The glue that holds my company together is loyalty and tradition. • My company emphasizes human resources.

Developmental culture: • My company is a very dynamic and entrepreneurial place. • My head of the company is generally considered to be an entrepreneur, an innovator,

or a risk taker. • The glue that holds my company together is a commitment to innovation and

development. • My company emphasizes growth and acquiring new resources.


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Hierarchical culture: • My company is a very formalized and structured place. • My head of the company is generally considered to be a coordinator, an organizer, or

an administrator. • The glue that holds my company together is formal rules and policies. • My company emphasizes permanence and stability.

Rational culture: • My company is a very production oriented. • My head of the company is generally considered to be a producer, a technician, or a

hard-driver. • The glue that holds my company together is the emphasis on tasks and goal

accomplishment. • My company emphasizes competitive actions and achievement.

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