The Role of Culture in Comparative Management: A Cross-Cultural Perspective

Author(s): Lane Kelley and Reginald Worthley

Source: The Academy of Management Journal, Vol. 24, No. 1 (Mar., 1981), pp. 164-173
Published by: Academy of Management
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? Academy of Management Journal

1981, Vol. 24, No. 1, 164-173.

The
Role
of Culture
in
ComparativeManagement:
A
Cross-Cultural
Perspective
LANE KELLEY
REGINALD WORTHLEY
University of Hawaii

For at least the last twentyyears, the literaturehas

yielded diverse positions on the transferability of
modern managementprinciples into different cultures.
A reviewof the researchshows that most cross-cultural
studies are actually cross-nationalstudies which means
comparingsocio-cultural,political, and economic systems and not just culture. Two of the more important
modelsare describedin termsof the role of culture-the
Farmer-Richman model and the Negandhi-Prasad
model. One of the models identifies managementas a
dependent variable, and the other as an independent
variable.The researchwas conductedto contributeto a
resolution of this difference. The researchdesign isolated the role of cultureby controllingfor the political,
economic, and educationalvariables.
The field of cross-culturalor comparativemanagementis in an early
stageof its scientificdevelopment.Muchof the workis concernedwiththe
identification and description of differences across cultures. Several
writers(Roberts, 1970;Evans, 1975;Negandhi, 1973;Beres,Portwood, &
Portwood, 1977)have suggestedthe need to move on to conceptualdevelopment and hypothesistesting. The presentstudy proposedto contribute
to an understandingof the differencesin two of the more popularcrossculturalmodels.
Thereare conflictingpositions in the cross-culturalmanagementliterature concerningthe relationshipbetween culture and managementpractices. Harbisonand Myers(1959)have statedthat as nationsindustrialize,
beliefs concerningleadershipchangeand increasingconstraintsare placed
upon management'sauthority.This was basicallya convergencehypothesis that proposedthat managerialbeliefs are correlatedwith the stages of
industrialdevelopment.In the early 1960s, Winston Obergproposedthe
164

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Kelley and Worthley

165

converse:"Culturaldifferencesfrom one countryto anotherare moresignificantthan many writersnow appearto recognize.A [universalistclaim]
is hardly warrantedby either evidence or institutionat this stage in the
developmentof managementtheory" (1963, p. 142). George England
(1974)commentedon the validityof a "convergencehypothesis"basedon
the resultsof 14 researchstudiespresentedat a cross-culturalconferenceat
the Universityof Hawaii. He concludedthat countryand/or culturedid
make a significantdifferencein many of the variablesstudied. Of the 14
studies, 3 seemed to indicate that countriesmake little differencein the
variablesstudied. The remaining11 studies generallyfound that country
and/or culture does make a significant difference. In one of his own
studies, Englandreportedthat the rank ordersof personalvalue systems
of Americanand Australianmanagersare correlated.95, but their personal valuesare correlatedonly in the .60s and .70s. In a sampleof managers
from FarEasterncountries,the valuesof managersfrom Japanand Korea
are correlated.92, but both correlateat much lower levels with the values
of managersfrom other countriesin the sample.
In anotherrecentarticle,Negandhi(1975)statesthat thereis increasing
evidenceto supportthe contentionthat managementpractices,behavior,
and effectivenessare as much, if not moreso, functionsof such contextual
variablesas size, technology, location, and marketconditionsas they are
of socioculturalvariables.In the sameyearand the samejournal, Bedeian
stated, "It is a well-establishedfact that differentculturespossess different organizationalnorms and behaviorstandardsand that they recognize
these as legitimateforms of influence" (1975, p. 287). In summary,the
role of culturein termsof managementattitudesstill is not fixed.
Thereseem to be basic reasonsfor the differentpositionsregardingthe
linkagebetweencultureand managerialattitudes,behavior,and effectiveness. The first problem is the vague definitions of culture. In a recent
paper, Child and Kieserstate: "Culturesmay be defined as patternsof
thought and mannerswhich are widelyshared.The boundariesof the social collectivitywithin which this sharingtakes place are problematicso
that it may make as much senseto referto a class or regionalcultureas to
a nationalculture" (1977, p. 2). The second problemis the methodological difficultiesof accuratetranslationand havinga representativesample.
Many of the studies simply do not have samplesthat can be considered
representative.A thirdproblemis that studiesreportingto have a culturefree context are actuallynationalstudies. A comparativestudy of French
and Germanmanagersnot only comparesthe impactof theircultures,but
also of other factorssuch as theirpoliticaland economicsystems.It might
be that the cultureshave similarattitudeson those variablesclosely associated with managementbut no differencesbecause of culture were reported. For example,the valuesof Americanand Englishmanagersmight
be similar, or more similar,than those of Taiwaneseand Koreanmanagers. Regardless,the argumentcan be madethat the use of a nationalsample is not in the strictestsense a sampletesting for the impact of culture.

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Academyof ManagementJournal

166

March

COMPARATIVE MANAGEMENT MODELS

The theoreticalmodels of Negandhi-Prasad(1971) and Farmer-Richman (1965) propose differences concerningthe importanceof culture.
Farmerand Richmandescribecultureas a major variablein determining
both managerialand organizationaleffectiveness.On the other hand, Negandhiand Prasad'smodel describesmanagementphilosophyas a major
independentfactor.
The Farmer-Richmanmodel employs four key concepts: comparative
managementproblems-relative managerialefficiency; internalmanagement-coordination of human and material resources; external constraints such as economic, legal-political,sociological, and educational;
and managerialefficiency. Schollhammerdescribesthe model as ecological-a passive creatureof externalconstraintsand "as a result, there is
generallyan over emphasison the necessityfor environmentaladaption
and not enough attentionis paid to the fact that managementmay choose
to act in defianceof certainexternalconstraints"(1969, p. 86). Thismodel
is graphicallydepictedin Figure 1.
Negandhiand Prasadarguethat if the environmentaland culturalfactors were the main determinantsof managementpracticesand effectiveness, one would expect close similaritiesin the managementpracticesof
two comparableindustrialenterprises.(They use as an examplethe two
Americanretail chains-Montgomery Ward and Sears Roebuck-which
are basicallyin the same businessand confrontedwith similarmarketand
FIGURE 1
Farmer-Richman Modela
Affect
+

. I

External
Constraints
Affect
Educational
Soctiologial
SociLological
Legal-political
Economic
~Econom~i~c

.,

Elementsof the
ManagementProcess

Planning
Organizing
Staffing
Directing
Controlling in
Policy making
operatingareas

Affect
-

Management
and
Managerial
Effectiveness

~ Determine
Firm
efficiency
~ Determine
System
efficiency
aFarmerand Richman(1965, p. 35).

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Kelley and Worthley

167

FIGURE 2
Negandhi-Prasad Modela
Management
Philosophy
Management Attitudes
toward
Employees
Consumers
Suppliers
Stockholders
Government
Community

Management
Practices
Affect

Environmental
Factors
Socioeconomic
Educational
Political
Legal

Planning
Staffing
Motivating and
directing
Controlling

Affect
Affect

A
Affect

Management
EffectivenessJ

Effectiveness

aNegandhi and Prasad (1971, p. 23).

environmental conditions; yet their managerial practices and effectiveness

are hardly the same.) Their model identifies basically the same external environment but recognizes management philosophy as an independent variable. Figure 2 illustrates the Negandhi-Prasad model.
PURPOSE OF THE STUDY

The purpose of the present research is to contribute to the resolution of

differences between two of the most popular theoretical models in crosscultural management studies-the Farmer-Richman model and the
Negandhi-Prasad model. The sample design used to isolate the role of culture is depicted in Figure 3.
This design reduces some of the problems associated with many of the
cross-cultural studies. Negandhi has said that "it appears that culture, although used as an independent variable in most cross-cultural studies, has
a most obscure identity and often is used as a residual factor" (1971, p.
26). An examination of Figure 3 supports his contention. Most empirical
FIGURE 3

Research Design for Isolation of Culture

Si
CaucasianAmerican Managers
Culture

S2
JapaneseAmerican Managers
I Culture

S3
Japanese
Managers
Culture

Education
Economic
Legal

Education
Economic
Legal

Education
Economic
Legal

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168

Academy of Management Journal

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cross-culturalmanagementstudiesdo not isolate the impactof culturebut

are actuallynational studiesthat also reflect other factors such as education and economic and legal systems,which are identifiedin both Negandhi-Prasad and Farmer-Richmanstudies. The sample in the present researchconsistedof threegroups-Caucasian-American,Japanese-American, and Japanese managers. The Caucasian-Americansand Japanese-Americanshave been exposed to the same economic and legal systems, education, and culture; the only commonalitybetween the Japanese-American and Japanese managersis a cultural link. If the Japanese-Americanmanagers'responsesare observedto be moresimilarto the
Japanesethan to the Caucasian-Americans,the culturallink would seem
to be the cause. The operationaltests are:
1. One test is for differences between mean responses for the three
groups, with differences between Japanese and both American
groupspointingto nationaldifferences,and differencesbetweenthe
two Americangroups without differencesbetweenthe Japaneseand
Japanese-Americangroupspointingto culturaldifferences.
2. Anothertest supportingan importantrole for culturein determining
managerialattitudesis based on the sequenceof responses(means)
for the entireset of 15 items, with the predictedpositionsdetermined
by a reviewof the literature(Brown, 1971;Drucker,1971;England&
Lee, 1974; Froomkin, 1964; Harari & Zeira, 1977, 1978; Noda &
Glazer, 1968; Smith, 1959). It was postulated that the JapaneseAmericanresponseswouldbe betweenthose of the Caucasian-Americans and the Japanesebecause of their Japaneseculturalheritage
coupledwith a lifetimeexposureto the U.S. political, economic, and
educationalsystems.
Therefore, there are two basic statisticaltests of the hypothesis. The
first test is for significantdifferencesbetweenmeans. No significantdifferenceswould indicateno nationalor culturaleffects on managerialattitudes. If the only difference is between the Japaneseand the American
groups, only national differenceswould be indicated. If there are no differences between the Japaneseand Japanese-Americansbut both differ
from the Caucasian-Americans,culturaldifferenceswould be indicated.
The second test, sequenceof responses,tests only for the impact of cultural and not national differences.The authorsexpectednational differences to occur, but they also expectedthat culture would play a role in
each group'spositionrelativeto managerialattitudes.Thereforethe rationale for the second test.
The sampleconsistedof individualsin managerialpositionsof financial
and Japaneseinstitutionsin Hawaiiand Japan.The Caucasian-American
American managers were employed in the same organizations, which
biased the sample in the directionof the nonculturalhypothesis. This is
becauseboth groupswere exposed and matchedin termsof sizes of organization, technology, structure,climate, and other organizationalvariables. This would seem to make it more difficult for thereto be a similarity

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between Japanese and Japanese-Americanmanagers. The sample conmanasisted of 41 Japanese-American

managers,27 Caucasian-American
gers, and 62 Japanesemanagers.The subsampleswere similarin termsof
management level (all were middle management) and age (X2=.855,
p> .25) and education (X2= 1.47, p>.25). It should be noted that the
Japanese-Americansin Hawaii comprise the largest single demographic
group (excludingthe militarypopulation)of the state's population. This
fact has helpedpreservethe insularityof Hawaii'sculturalpatterns,thereby allowing the experimentaldesign describedhere. This has been supportedby Kitano's(1968)researchin whichhe reportsthat the Japanesein
Hawaiiretainmore "Japaneseways" than other Japanese-Americans
because of a largerand more cohesiveethnic culture. The Japanese-American managersin the sample are mainly third generation(sansei) and the
remainderare fourth generation(yonsei).
The 15-itemquestionnairewas designedto measuredifferencesin managerial attitudes. A 5-point Likertscale rangingfrom stronglydisagreeto
stronglyagreewas used. The questionnairewas translatedfrom Englishto
Japanesethen verifiedby havingan independentsourcetranslatethe questionnaireback to Englishto insurethat the Englishand Japaneseversions
weremeasuringthe same concept.
RESULTS
Table 1 identifies the managementpracticesand attitudesincluded in
the questionnaire.The directionof the hypothesiswas based on descriptive articles and empiricalstudies of Japanese management.The items
covered writtenprocedures(two), centralizationof decision making, paternalism, diversifiedexperience,seniority, self-motivation, team work,
and companypolitics.
The first statisticaltest for differencein responsesindicatesa dissimilarity of responsesbetweenthe Americanmanagersand the Japanesemanagers. Of the 11 items that showed significant differences, the Japanese
group was separatedfrom at least one Americangroup in all 11 cases and
from both Americangroups on 8 of these 11 items. On only three of the
items was a significant difference found between the two American
groups. This would implythat culturewas not strongenoughto createsignificant differencesin managerialattitudesbut that there are "national"
differences.The major obstaclein this case is the smallersamplesizes involved in comparingthe two Americangroups(27 and 41). This is a result
of the highly stratifiedsampleneededto obtain Caucasian-American
and
Japanese-Americanmanagerssimilarto the Japanesegroup with respect
to industry,managementlevel, and age to control for contextualfactors
other than nation and culture.The procedureused, distribution-freemultiple comparisonsbased on ranks, requiresmuch larger differencesbetween the smaller groups in order to be designated "significantly
different." In many cases the actual differences between the mean

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TABLE 1
A Summary of Results from Japanese (1), Japanese-American (2)
and Caucasian-American (3) Managers on 15 Likert Scale
Statements Concerning Managerial Attitudes
Orderof Sample
Results

Significant
Differencesa

GroupI statements:The predictedorderis 3 < 2 < 1, with the Japanesemanagersin strongeragreement.

1. Self-motivation
3<1
Agreement
"
2. Self-development
3<2<1
"
3. Groupappraisal(2)
3, 2<1
"
4. Centralizeddecisionmaking
3, 2<1
"
5. Participationin decisionmaking
3, 2<1
6. Long termemployment
3, 2<1
7. Cooperation
none
8. Groupappraisal(1)
2, 3 reversed
2, 3< 1
9. Promotionbasedon seniority(1)
2<3, 1
"
2<1
10. Promotionbasedon seniority(2)
none
11. Diversifiedexperience
none
12. Respectfor formalauthority
managersin
Group II statements:The predictedorderingis 1, 2, 3 with the Caucasian-American
strongeragreement.
1<2<3
In agreement
13. Companypoliticsand careerprogress
"
1<3
14. Writtenprocedures(2)
none
3<1<2
15. Writtenprocedures(1)
aSignificantdifferenceswere determinedwith distribution-freemultiplecomparisonsbased on
ranksums.
Kruskal-Wallis

responsesof the two Americangroupswerecomparableto differencesbetweenthe Americangroupsand the Japanesegroup. Also, if a higherlevel
of significance was used, differences would show up between the two
Americangroups on severalother items.
The second statisticaltest, the sequenceof responses,supportsthe role
of culturein the formation of managerialattitudes. Of the 15 items' sequence of means, 9 agreeexactlywith the predictedordering.The probability of observingas many as 9 out of 15 sequencesin the exact expected
ordering(assuminga binomial model with P= 1/6, the 6 possible orderings) is only .00019. Of the six items in which the orderingdiffered from
the hypothesis,only the two Americangroupsdifferedin five of the cases,
and only one of these (number9) revealedany significantdifferencebetween the Americangroups. Only item number15 showedany substantial
differencein orderingthan hypothesized,and no significantdifferenceis
found on this item betweenany of the groups. The readeris remindedthat
in five of the six sequencesthe Japaneseresponseswere in the predicted
position, but not the responsesof the Japanese-Americans.Even though
they were "out of place," they were not significantlydifferent from the
Caucasian-Americanresponses. The readeris also remindedof the very
small probability(.00019) of having 9 out of 15 sequencesin their exact
predictedposition.
It was expected that it would be more difficult to separate the two
Americangroupsfrom each other in termsof managerialattitudesthan to

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show differencesbetweenthem and the Japanesegroups, and this is supported by the results. Of the 11 items that showed significantdifferences,
the Japanesegroupwas separatedfrom at least 1 Americangroupin all 11
cases and from both Americangroups on 8 of these 11 items. On only
three of the items was a significant difference found between the two
Americangroups. The authorsfeel that the lack of significantdifferences
betweenthe two Americangroups, despitethe preponderanceof items in
predictedorder, is due mainlyto the difficultyinvolvedin obtaininglarge
samples that are comparablymatched in terms of education, age, and
manageriallevel in a similarorganization,especiallyfor these two ethnic
groups.
CONCLUSION

The purposeof this study was to isolate the role of culturein order to
test its relationshipto managerialattitudes. This was accomplishedby a
researchstrategythat took samplesof Japanesefrom Japan and Hawaii
and Caucasiansfrom Hawaii in order to look for similaritiesand differences in theirmanagerialattitudes.This sampledesignallows for an isolation of the role of cultureby having culturethe common factor between
Japanesein Hawaiiand Japan.As for the two Americangroups,the Japanese-Americanand Caucasian-Americanmanagershave been exposed to
the same sociopolitical systems-legal, political, and educational-plus
the same organizationalenvironment.The Japanesesubsamplewas similar to the Americansample in terms of industry,managementlevel, and
age. The American subsample of Japanese-Americansand CaucasianAmericanswas similarin termsof all of the externalfactorsidentifiedby
both the Negandhi-Prasadand the Farmer-Richmanmodels except culture. The findings suggest the importanceof both national and cultural
difference. The first statisticaltest designedto isolate both national (differencebetweenJapaneseand the two Americangroups)and cultural(differencebetweenthe two Americangroups)effects on managerialattitudes
supportedmuchless fully the culturaldifferencesthan nationalones. Two
reasons, samplesize and the multiplecomparisonprocedure(designedto
be 95 percent confident of all inferencessimultaneouslyon an item, insteadof separate95 percentconfidenceson each of the threecomparisons
per item), led to very few items pointing out significantculturaldifferences.
However,the secondtest, usingall 15 itemsat once (insteadof separately) and observingcorrectpredictedorderingsbased on both national and
culturaldifferences,points much strongerto the existenceof both factors
in determiningmanagerialattitudes. In 9 of the 15 items, the sample orderingagreesexactlywith the predictedordering.Thereare six possibleorderingsin each item, and if there were no nationalor culturaldifferences
the probabilityof predictingthe sample order would be only one in six.
The probabilityof predictingas many as 9 out of 15 sequencesjust by

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chance alone is only .00019. This indicatesthat a theory of both national

and culturaldifferencesis highly supportedby the ability to predictthe
correctorderingin so manycases. The nine correctpredictedorderingsare
even more importantwhen it is noted that there are some items in which
there seem to be no real differencesin attitudes either culturallyor nationally. Items 11, 12, and 15 (Table 1) areillustrativeof these; no significant differencesare found. In the otherthreeitemsin whichthe sampleorderingswere not as expected,in only one case was there a significantdifferencethat was in the reverseof the predictedposition betweenthe two
Americangroups (item 9). Furtherresearchis requiredto come to any
conclusion concerningthe items in which the mean responses, although
not significantlydifferent, were reversed. Perhaps these reversalshave
been caused by the problemsassociatedwith two differentculturesfunctioningwithinthe sameorganization;especiallywhenone traditionallyhas
been considereda minoritygroup. For example,in studiesof comparisons
of Japanese-Americanand Caucasian-Americancollege students in
Hawaii,it was found that the sansei (thirdgeneration)maleappearedto be
"more introverted,more anxious...and lower in leadershippotential"
in leadershipposi(Meredith,1977);there was "an under-representation
tions" (Barton& Kalish, 1961);and "the Japanese-Americanwas experiencinga 'leadershipcrisis'" (Burma,1953).Thesedifferencesmay explain
in partthe unpredictedreactionof the Japanese-Americans
to "groupappraisal," promotionbased on seniorityand respectfor formal authority.
The resultsof this study supportthe position of Farmerand Richman
(1964)on the role of culturein the formationof managerialattitudesand
not the position of the Negandhi-Prasadmodel. This does not negatethe
importanceNegandhiplaceson other contextualvariablessuch as organization size, technology, location, and market position. For example, in
two researcharticlesby Harariand Zeira(1977, 1978), it is reportedthat
Japanese working in foreign-ownedmultinationalcorporationsconsidered clearly defined goals and evaluationto be more desirablethan did
Japaneseemployeesin Japanesecorporations.The results of the Harari
and Zeira studies and the contextual factors emphasizedby Negandhi's
(1975) research-size, technology, location, and market-were shown to
be significantin their research,but the presentstudy supportsthe importance of culture-at least for the Japaneseculturein terms of the formation of managerialattitudes.
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