Corporate culture and organizational effectiveness: is there a similar pattern around the world?



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CORPORATE CULTURE AND ORGANIZATIONAL EFFECTIVENESS:
IS THERE A SIMILAR PATTERN AROUND THE WORLD?

Daniel R. Denison
International Institute for Management Development

Chemin de Bellerive 23

Lausanne, Switzerland CH-1001

(41.21.618.0311)

denison@imd.ch

Stephanie Haaland
Denison Consulting

121 W. Washington St, Suite 200

Ann Arbor, MI 48104

(1.734.302.4002)

shaaland@denisonculture.com

Paulo Goelzer
IGA Institute

8725 West Higgins Rd.

Chicago, IL 60631

(1.773.695.2638

pgoelzer@igainc.com

November 2002

The authors would like to thank the International Institute for Management Development for their support of this research. In addition, we are grateful for the involvement of all the managers and executives who participated in this study, as well as the helpful comments of the Editors.
CORPORATE CULTURE AND ORGANIZATIONAL EFFECTIVENESS:
IS THERE A SIMILAR PATTERN AROUND THE WORLD?

ABSTRACT

This chapter presents two studies that examine the link between corporate culture and effectiveness in a variety of national settings. The first study compares results from 230 organizations from Europe, North America, and Asia and reveals a surprising level of similarity of results across these regions. The second study presents the results from targeted samples of 218 supermarkets from Canada, Australia, Brazil, USA, Japan, Jamaica, and South Africa. These results show a common pattern of results in five of the countries, and a divergent pattern of findings in Jamaica and Japan.

The results suggest that it is quite possible to measure and compare the cultural traits of organizations and their impact on business performance across nations and to find empirical support for a general framework. But how can these findings be reconciled with the vast literature on cross-cultural differences? Discussion of this point reaches an interesting conclusion: Perhaps there are a common set of cultural traits that can be used to understand the effectiveness of organizations, but that these common traits are expressed quite differently in different national settings.




One of the most difficult challenges for the field of international management is the application of theories and models developed in one part of the world to understand phenomena that occur in another part of the world. Much of the early concern about this issue concentrated on the relevance of American theories abroad (Hofstede, 1980a). But more recently, the same problem has been faced by Japanese theories of quality control (Imai, 1986) or knowledge creation (Nonaka & Takeuchi, 1995), or by European theories of joint ventures or organizational design (Doz, 1986; Taylor, 1991). The goal of these efforts is to develop a useful general frame of reference, but also allow for the sensitivity to local variation that is required to have value when applied in context.
Some of the biggest challenges for developing theories with cross-cultural relevance come in the area of organizational studies. Differences in behavior, work values, and culture have been studied by many researchers in many different countries. Several frameworks have proven useful for understanding cultural differences (Trompenaars, 1994; 1998; Hofstede, 1980b) and have helped to establish some relatively universal dimensions (eg. individualism) that can be useful in understanding differences across national cultures. But few researchers have attempted to understand the impacts that these behavioral differences have in different national contexts.

The logic of cross-cultural comparison and validation has been discussed at length by several authors (Adler; 1991; Boyacigiller & Adler, 1991). But in most areas of the literature, the biggest challenge is the almost total absence of comparative data. Our literature review found very few studies that offered a comparison of the effectiveness of organizations across several countries, that could be linked to differences in organizational culture, work values, and behavior. The evidence that global leaders need in order to understand the impact of the organizational cultures that they are creating is usually unavailable.

This chapter takes a bold, but risky approach to these challenges by examining the link between organizational culture and effectiveness with two separate studies. The first study examines this link with data from 230 organizations from Europe, North America, or Asia, and reveals a surprising level of similarity in the results across these regions. The second study examines the same topic using data from 218 organizations from seven countries: Canada, Australia, Brazil, USA, Japan, Jamaica, & South Africa. This study focuses on samples of supermarkets that were part of an independent cooperative operating in a similar fashion in each country. The results show a high level of similarity in five of the countries, but a divergent pattern of findings from Japan and Jamaica. These two studies constitute a preliminary and exploratory step, rather than a comprehensive study, but they do illustrate that a general theory about organizational culture can be applied in multiple contexts, with results that highlight both similarities and differences across regions.

This chapter begins by describing a model of organizational culture used in this study and discusses some of the research, conducted primarily in the USA, that has established a link between culture and effectiveness. We then pose several general research questions that guided our study. After that, we describe our samples, the data collection and analysis strategies, and report our results for both of the studies. Our discussion at the end of this chapter summarizes our findings, reflects upon their implications for cross-national research, and then considers some of the approaches that might facilitate future research in this area.

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