International Business Review Vol. 5, No. 5, pp.

469-486, 1996

Pergamon

S0969-5931 (96)00022--4

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
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 grouporiented, 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 c o n d u c t e d to e m p i r i c a l l y e x a m i n e the
organizational cultures of firms in Hong Kong. This paper first discusses the
current thinking about organizational culture and possible ways to measure
culture. The r e l a t i o n s h i p s b e t w e e n d i f f e r e n t national cultures 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.
Practices can be d e f i n e d as rules, p r o c e d u r e s , 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

471
Kennedy, 1982; Schein, 1992). These are the content themes to which Martin
and M e y e r s o n (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 M e y e r s o n (1988) successfully
demonstrated the advantages of analyzing an organization 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.

Issues

Organizational
Cultures of
Firms

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 (Bernsteinand Burke, 1989; Cooke and
Rousseau, 1988; Quinneand Spreitzer, 1991)

National culture and

organizational culture

Important impact of national culture on organizational culture

(Adler and Jelinek, 1986; Doktor, 1990; Hofstede, 1991)
Overseas subsidiariesreflect home country's culture (Hofstede
et al., 1990; O'Connor, 1995)
Single-country vs multiple-countryapproach (Hofstedeet 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 i s c u s s i o n , we can s u m m a r i z e the c o n s t r u c 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 beliefs, values, ideologies, and shared perceptions 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
organizational level. For e x a m p l e , 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 q u a n t i t a t i v e t e c h n i q u e s (such as s t r u c t u r e d s u r v e y
questionnaires) to assess organizational culture at the organizational level has
been supported recently by Tucker et al. (1990). T h e y d e v e l o p e d 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 theoretical
framework and has not yet been validated.
Quinn and Spreitzer (1991) reported the psychometrics of a culture
questionnaire developed from the competing values framework (Quinn, 1988)

473
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 Likertscale 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 m a n a g e m e n t 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

475
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
e x a m p l e , a h i g h - p e r f o r m a n c e h i g h - i n v o l v e m e n t culture p r o v i d e s
organizational members with shared attitudes toward organization objectives
and establishes commitment to corporate values. Organizational culture also
serves as a control m e c h a n i s m to guide e m p l o y e e s 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 interpersonal 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-institutional factors constant. In addition, 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 c o m p o s e d 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 educational and c a r e e r
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

477
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 retailing (14%); m a n u f a c t u r i n g (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 16item 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-traitmulti-method (Quinn and Spreitzer, 1991; Zammuto and Krakower, 1991), it
is acceptable to analyze further using the cultural measures.
The sample was r e - g r o u p e d according to the country origins of
respondents' organizations. This resulted in 195 local Hong Kong Chinese

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Table 2.

MANOVA Results
of Four Cultural
Types Across Four
Country Groups

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 p r e s e n t s the r e g r e s s i o n a n a l y s i s r e s u l t s o f the e f f e c t s o f
organizational culture types on o u t c o m e m e a s u r e s , n a m e l y affective
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

Group
Developmental
Hierarchical
Rational
n

Local

PRC

UK

USA

12'99a
13-21a
12-07a
12.89a
195

13"64a
12"09b
13"19b
11-89b
47

1l'81b
11"72b
13-79b
12"67ab
130

12"28b
13"67a
12"70ab
13"84c
131

UnivariateF
7-34*
9"04*
11-09*
8"76*

Multivariate F = 10"65", *P < 0.01.

Means with the same superscript letter are not significantly different at 0.05 by LSD test.

479
Affective
commitment
A. Local Hong Kong Chinesefirms
Group
0"704"*
Developmental
0-188 * *
Hierarchical
-0.093
Rational
0.012
F
R2

B. Mainland Chinese (PRC)firms

Group
Developmental
Hierarchical
Rational
F
R2

C. British firms
Group
Developmental
Hierarchical
Rational
F
R2

D. US firms
Group
Developmental
Hierarchical
Rational
F
R2

Continuance
commitment

Job
satisfaction

Organizational
Cultures of

Firms

61-79"*
0.568

0" 165"**
-0" 042
0.111
0" 128
4.69**
0.091

0"479"*
0" 107
0"089
-0-077
19.97"*
0"296

0.509**
0.016
-0.150
0"323*
8"76**
0"461

0.139
-0"224
-0'081
0'388*
1'43
0-122

0"586**
0" 167
0"007
0" 123
14"48"*
0"580

0"372**
0"410"*
0-027
0.014
29.26**
0.484

-0-070
0-025
0.178"**
0.174
2.34
0.070

0-411"*
0.095
0.077
0"087
12-99"*
0"294

0"506**
0"243**
0.045
-0'063
18.47"*
0"372

--0.017
-0.087
-0.029
-0.183"* *
1'95
0"059

0"235**
0"334**
0.101
- 0 ' 120
7"89
0"200

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 c o m m i t m e n t 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

Table 3.
Regression Results
of Cultural Types on
Commitment and
Satisfaction for Each
Country Group

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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 o u t c o m e m e a s u r e , c o n t i n u a n c e 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

481
individualism, and high in masculinity. This implies that American firms are
more innovative, have a g r o w t h orientation, and e m p h a s i z e personal
achievement. This is consistent with the findings of this study.
Within each country, the causes of satisfaction and c o m m i t m e n t 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 c o m m i t m e n t refers to the c o m m i t m e n t 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
c u l t u r e . The positive e f f e c t s o f d e v e l o p m e n t a l c u l t u r e on a f f e c t i v e
c o m m i t m e n t are worth further discussion. T h o u g h the e f f e c t size of
developmental culture in some cases is smaller than group culture, this
cultural emphasis is nevertheless a contributing factor to e m p l o y e e s '
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 c o m m i t m e n t 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 effective 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
cultural e m p h a s e s do not have the same impacts on o r g a n i z a t i o n s '
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
intentions and motivational strength 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

483
heterogeneous (Hofstede et al., 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.
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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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.