Interdisciplinary Research Within a Modified Competing Values Model of Organizational Performance

Abstract

An interdisciplinary model of firm performance based on a modified and extended Competing Values Model of Organizational Culture combines elements drawn from three different research traditions-organizational culture and climate from organizational behavior, innovativeness from economics, and market orientation from marketing. The model has been used to analyze firm performance in business-to-business markets in a number of countries in the industrial and the industrializing worlds. In general, successful firms are found to be innovative, market oriented, and to have organizational cultures and decision-making climates which are externally oriented. In most countries, there are also identifiable national culture-specific patterns. In this paper, we focus on the inter-relationships among the streams of research upon which the model is built. Using Brazil, previously unstudied in this context, we attempt to identify a structure among the model elements to test hypotheses about (1) the inter-relationships of the explanatory variables, and (2) the relationships of the explanatory variables to each other and to firm performance. We find that the contributing disciplines produce interpretable results, and that performance is improved by achieving good results simultaneously along several inter-related dimensions.     

Organizational Culture,Innovativeness, Market Orientation and Firm Performance in South Africa: An Interdisciplinary Perspective

ABSTRACT

For a sample of South African firms, this paper analyzes the relationships of firm performance and a set of organizational measures which includes organizational culture and climate, market orientation and innovativeness. These organizational measures are drawn from three different disciplines–organizational behavior, strategy and economics. The replicative study is framed in an extended model of competing organizational values which have been used in 13 countries including three transition economies (Vietnam, China and Russia). The work has also been done under a variety of conditions–for example, the US in a period of study growth, Thailand during the Asian Crisis and Hong Kong after the handover to China. Comparisons are made between South African results and those of firms from a group of five industrial countries. Market Orientation is the most important explainer of performance of the South African firms, and Innovativeness is also important. Specific elements of Organizational Culture are apparently less important in South Africa than elsewhere.     

High Performance Firms in a Complex New China

SUMMARY

A study published in the Journal of Global Marketing(Deshpandé and Farley 2000) found that, for a representative sample of Shanghai firms competing in business-to-business markets, success was related to innovativeness, a high level of market orientation, and outward-oriented organizational cultures and climates. Because of the great cultural diversity of China, questions were raised at that time and subsequently as to whether these results generalize to other parts of China. To the extent that the Shanghai results do generalize, the development of a more general strategy for dealing with Chinese business-to-business markets will be feasible. We compare organizational cultures and personal values of managers in representative samples of firms in six Chinese cities. There are indeed systematic differences among the cities- Beijing, Shanghai, Guangzhou, Tianjin, Shenzhen and Wuxi. Shanghai firms seem the best-positioned for transformation to a more market-oriented economy in terms of innovativeness and market orientation. There are also some differences among State-Owned Enterprises, Joint Ventures, Village-Based Enterprises and Wholly-Owned Foreign Subsidiaries. There are, however, clear patterns of similar response among firms which perform well in terms of high levels of innovativeness and market orientation, plus organizational cultures relatively open to outside influences. All kinds of firms seem to draw their managers from a pool of people who hold much the same kinds of values.     

Symmetric and asymmetric leadership cultures: A comparative study of leadership and organizational culture at Hyundai and Toyota

This study compares national cultures, leadership strategies, and work environments in two successful global automobile companies, Hyundai Motor Group and Toyota Motor Corporation. Despite competing head-on in the same market, it was found that these companies use very different leadership strategies as a basis for both global competition and local operations. Based on the results of a comparative case study, structured interviews, and related media and empirical data, it was found that Toyota competes both strategically and managerially by emphasizing planning and work systems to mitigate the impact of any turbulence in the external environment (stability is key), while Hyundai competes by accepting environmental uncertainty and risk as a part of normal daily operations (flexibility is key). We refer to these approaches as symmetric and asymmetric leadership and organizational cultures. As a result of these differences, Hyundai is able to change course more quickly than its larger competitor as new opportunities and technologies emerge. While national cultures played a role in differentiating between the two firms, leadership differences had a more pronounced effect on organizational behaviors and subsequent performance. Results are consistent with previous research and reinforce the conclusion that top management leaders’ behavior can have a significant influence on emergent organizational cultures and performance.     

An empirical investigation of the antecedents and performance outcomes of export innovativeness

The present study develops and empirically tests a conceptual model of the organizational, strategic, and environmental drivers of export innovativeness. The relationship between export innovativeness and export performance is also examined. Using data collected from 168 small- and medium-sized direct exporters, we find that decentralization in decision making, export market orientation, information exchange and export market dynamism have a significant influence on exporting firms’ degree of innovativeness. Furthermore, export innovativeness has a significant positive effect on export performance. Several theoretical and managerial implications are derived from these findings. Directions for future research are also provided.     

Strategies,technologies, and organizational learning for developing organizational innovativeness in emerging economies

Innovativeness is an important organizational capability for competitive advantage sustainability in the dynamic environment of Asia's emerging economies. Drawing upon dynamic capability theory, this study develops a research model of organizational innovativeness development for firms in emerging economies. The proactive strategic orientations reflected by entrepreneurship and technology oriented strategy provide important visions for organizational innovativeness. Further, the utilization of knowledge management systems and organizational learning are identified as intervention processes that translate these strategic orientations into real innovation capability. A survey involving 114 firms operating in China was conducted for hypothesis testing. The empirical results provide strong support and advance the knowledge of organizational innovativeness development for firms in Asia's emerging economies.     

Intellectual capital and innovativeness in software development firms: the moderating role of firm size

Abstract

We examine the effect of intellectual capital on firms’ innovativeness and the moderating role of firm size in software development firms in Kenya. Using moderated regression analysis, we found support for the proposition that human and social capital enhance firms’ innovativeness. We did not, however, find any significant effect of organizational capital on firms’ innovativeness. The results from the moderated regression suggest that the smaller the firm, the stronger the influence of intellectual capital on firms’ innovativeness. The results therefore indicate that human and social capital are critical in the innovation process and so firms that neglect these capitals are unlikely to realize the potential to innovate particularly in software development firms.     

‘Organizational learning culture’: an ingenious device for promoting firm's innovativeness

The present study focuses on the relationship between organizational learning culture (OLC) and firm's innovativeness. The area of innovation as well as organizational culture is crucial for organizations and for entrepreneurs because both provide the basis for sustainable competitive advantage and improved firm performance. The notion of OLC offers a set of customs and principles that enhances imperativeness of an organization. Information acquisition, information interpretation, and behavioral and cognitive changes (BCC) were used as elements of the organizational learning process. Constructs comprising innovativeness are innovative culture, and technical and administrative innovation (innovations). Data were collected from 50 randomly selected Pakistani organizations. The results show significant and positive relationships among all hypothesized variables except for between BCC and innovations.     

How Small Business Advisory Program Delivery Methods (Collective Learning,Tailored, and Practice‐Based Approaches) Affect Learning and Innovation

Past studies relate small business advisory program effectiveness to advisory characteristics such as advisory intensity and scope. We contribute to existing literature by seeking to identify the impact of different advisory program methods of delivery on learning and subsequent firm innovation behavior. Our research is based on a survey of 257 Australian firms completing small business advisory programs in the three years preceding the research. We explore the range of small business advisory program delivery methods in which our surveyed firms participated and, with reference to the literature on organizational learning and innovation, we analyze predictors of firms' learning ability and innovativeness based on the identified delivery methods. First, we found that business advisory programs that involved high levels of collective learning and tailored approaches enhanced firms' perceptions of their learning of critical skills or capabilities. We also found that small business advisory programs that were delivered by using practice‐based approaches enhanced firms' subsequent organizational innovation. We verified this finding by testing whether firms that have participated in small business advisory services subsequently demonstrate improved behavior in terms of organizational innovativeness, when compared with matched firms that have not participated in an advisory program.     

Organizational memory influences new product success

Prior research on the impact of organizational memory on new product success has divergent perspectives. Such inconsistency has accrued mainly from not considering memory's multifaceted aspects, which interact with specific project characteristics. This paper tries to sort out this paradox by proposing that project innovativeness moderates the relationship among variables of organizational memory and new product success. An empirical study of 169 NPD projects of Korean manufacturing firms finds that memory sharing and the use of external information and formal procedures enhance new product success, whereas organizational memory has no effect. Project innovativeness is found to moderate memory's effect, despite some tradeoffs. As innovativeness increases, the effect of organizational memory and use of external information become stronger whereas the effect of memory sharing and use of formal procedures weaken. This suggests that firms must activate organizational memory more carefully according to project characteristics and the memory level to maximize its positive effects.     

Organizational Culture in Cote d'Ivoire

ABSTRACT

This study examines the nature of organizational culture in the West African nation of Cote d'Ivoire, using the competing values model as a framework. We found that the most common types of corporate cultures derive from the organic-mechanistic dimension of culture. Most firms integrate clan, adhocracy, and hierarchy cultural values. Moreover, strongest link with performance were the integrative corporate cultures. The findings lend credence to the growing belief that a mix of both informal (clan) and formal (hierarchy) organizational values is a solution to improving the efficiency of institutional management in Africa. doi:10.1300/J156v08n01_06served.]     

Is there really an Asian connection? Professional service quality perceptions and customer satisfaction

Scenarios involving dental services investigate whether Asian cultures are similar enough to allow standardization of service offerings. The authors control and manipulate levels of service quality and performance to yield a 2 × 2 experimental design, with Japanese, Chinese, and Korean subjects (N = 637) selected to test the invariance of the measures. The findings yield significant cultural differences with the Chinese respondents perceiving significantly higher service quality and expressing greater customer satisfaction when performance is high and expressing less customer satisfaction when performance is low than do the Japanese and Korean respondents. Thus, even though all three countries are considered high-context cultures, having their roots in Confucianism, differences in national culture lead to the conclusion that “one size does not fit all” in terms of service offerings.     

Organizational Culture,Competitive Strategy,and Performance in Ghana

The influence of competitive strategy on the organizational culture and performance relationship in Ghana is examined in this study using structural equation modeling. Results suggest evidence of both direct and indirect effects of organizational culture on firm performance. Firms with a predominantly clan or market culture were more likely to be directly associated with performance, whereas firms with adhocracy or hierarchy cultures were more likely to be indirectly associated with performance, depending on their alignment with a differentiation strategy or cost leadership strategy. However, only the link with differentiation strategy resulted in market performance. Managerial and theoretical implications are discussed.     

Better together: Trait competitiveness and competitive psychological climate as antecedents of salesperson organizational commitment and sales performance

This study assesses the direct and interactive effects of trait competitiveness and competitive psychological climate on organizational commitment and sales performance using data collected from industrial salespeople and company records. Findings indicate that the positive impact of trait competitiveness on sales performance is contingent upon a highly competitive psychological climate, helping to explain inconsistent findings in the literature and underscoring the need for firms to manage the fit between salespeople and organizational culture. Additionally, the study reveals continuance commitment’s negative moderation of the affective commitment–sales performance relationship. Taken together, the model reveals an interesting process such that managers should recruit salespeople with high trait competitiveness and foster a competitive climate internally to generate the best sales performance outcomes.     

Organizational Structure and Performance in Dutch small Firms

The relationship between organizational structure and performance in small firms has received relatively limited attention over the last few decades. In understanding small firm performance this seems to be a serious omission. In this paper, we first present the rationale for including organizational structure in the analysis of small firm performance. Then, from the literature on organizational theory, we retrieve several dimensions that may be postulated to describe organizational structures of small firms. Based on the study of a stratified sample of 1411 Dutch small firms we show that nine structure stereotypes can be delineated. We further investigate the relevance of the empirical taxonomy by looking at the relationship with firm performance in terms of sales growth, profitability and innovativeness. Eventually, we conclude that organizational structure indeed matters and that it deserves to be taken into account in models and future analysis of small firm performance.     

The impact of corporate and national cultures on decentralization in multinational corporations

We develop and test a model of multinational corporation (MNC) decentralization in which the allocation of decision rights to subsidiaries is explained by aspects of both internal corporate culture as well as external national cultures. We extend the literature on MNC decentralization by testing the impact of both of these factors as determinants within the same model. Drawing on management control theory as a conceptual platform, we argue that the assignment of decision rights to a subsidiary in the MNC is impacted by corporate innovativeness and shared values, as well by aspects of home and host country cultures. We test our model on a sample of 119 MNC subsidiary managers drawn from a diverse range of industries and locations. The findings provide support to the proposition that corporate innovativeness positively impacts the decision to decentralize, whilst also indicating that home country individualism and host country uncertainty avoidance have a significant influence. The findings challenge established international management logic with respect to shared values—this variable is found to have a negative relationship with decentralization. Overall cultural distance is not found to be significant.     

Facilitators of organizational innovation: The role of life-cycle stage

One of the most serious challenges facing an entrepreneurial company, particularly a high-technology firm, is knowing how to manage innovation as the organization evolves. Macro-level facilitators/inhibitors of innovation—i.e., organizational and environmental conditions of a firm that promote or restrain innovation such as the structure of an organization, its incentive system, resources provided by its environment, or its ways of analyzing firm-external information—and their relationship to the innovativeness of the firm are considered in this study.Two basic arguments have been put forward previously as to why the innovativeness of an organization may change as it evolves. First, it has been suggested that facilitators of innovation change over time and so will firm innovativeness. That is, the relationship between the facilitator and innovation stays unchanged but the facilitator itself is transformed, causing changes in firm innovativeness as it develops. For instance, it has been suggested that mature firms become less innovative because their structure becomes overly formalized to perform other functions more efficiently, which then stifles innovative processes. Second, other researchers have proposed that the relationship between a facilitator and innovation changes as firms evolve; for instance a formal structure may support innovation in a younger firm because it allows the entrepreneur to focus her energy, whereas it may suppress innovation later since it inhibits an innovator's interaction with other environments. The results of our analysis, using data from 326 U.S. firms in different stages of their development and involved in many kinds of high-tech industries, support the second theory.However, the results for the relationships of the individual facilitators to innovation were not always as expected. We found that formally structured young firms were less innovative than informal ones and that in older organizations, formalization had no negative impact on innovation. This finding possibly can be explained with micro-level facilitators of innovation: younger firms may have more entrepreneurial personnel whose ability for innovation is more inhibited through a formal structure than the more “seasoned” employees in older, larger firms. However, this finding implies that the concern for formal structures with respect to firm innovativeness does not necessarily apply as typically assumed.Of similar significance was our finding with respect to the relationship between financial incentives and innovation. It has been suggested that younger rather than older firms use incentives such as equity to encourage an innovative environment. Results of this research, however, show that innovation is associated with stock incentives especially in older firms. This may be an indication for older firms to use differentiated incentives that reflect the individual's contribution to the firm to retain innovative personnel, whereas start-ups might rely on the excitement of working in a new venture as an incentive for innovative behavior.More in line with expectations were the results for how firms process external information. Environmental scanning and data analysis were positively associated with innovation, and this more so in older firms, presumably because they have become more remote from developments outside the organization. This result confirms the notion that much innovation by a firm is initiated externally. However, the results also indicate that the conditions of the environment itself are of lesser importance to firm innovativeness than the firm's active pursuit of information from its environment. An often discussed implication of these findings is that the boundaries of a firm must be permeable, at least from the outside in, and systematic information gathering from customers, competition, research institutions, etc. may be necessary to the success of a firm that depends on its product development. This seems especially important for older firms.As expected, the centralization of power in an organization also affected innovation. Centralization correlated positively with innovation in new ventures and negatively in older firms. This indicates the importance of the entrepreneur and strong leader in a start-up. It also suggests, though, that as the firm matures, this person has to give up some of her control and may have to relinquish the job at the head of the organization to someone else.Finally, there are some more general implications of this work to managers involved with organizational innovation. First, reliance on past experience may be detrimental to future performance. Whereas a firm evolves through different stages, means that have facilitated innovation earlier may be detrimental to it now or tomorrow, and vice versa. Second, copying successful strategies for innovation from other firms may not necessarily work—not because their implementation was worse but because the conditions of the other firm, for instance its evolutionary stage or its micro-level facilitators, were different.Researchers who study innovation should consider including life-cycle stage as a potential moderating variable. Factors that facilitate innovation at some point during an organization's evolution actually hinder it in another. Also, factors that were unimportant to innovation at the inception of a firm may facilitate it in later stages. This study supports the conclusion that the consideration of contingency factors, such as life-cycle stage, may enhance the development of a theory of organizational innovation.     

Work Ethic,Locus of Control and Salesforce Task Performance

Abstract

This study explores the relationship between work ethic, locus of control and salesforce task performance. Using data from Uganda retail firms, this study finds that work ethic was a significant positive predictor of salesforce task performance. Further, there was a significant relationship between the different behavioural families of work-related activity work withdrawal behaviours, organizational retaliation behaviours and salesforce task performance. Results from regression analysis indicate that organizational retaliation behaviours and work withdrawal behaviours are important factors for explaining declining performance of salespeople in Uganda retail firms. Managers aiming to improve salesforce task performance should recruit individuals with a strong work ethic. Additionally, retail managers need to reduce work withdrawal and organizational retaliation behaviours so as to increase salesforce task performance.     

Team Ethical Cultures Within an Organization: A Differentiation Perspective on Their Existence and Relevance

Studies on the ethical culture of organizations have mainly focused on ethical culture at the organizational level. This study explores ethical culture at the team level because this can add a more detailed understanding of the ethics of an organization, which is necessary for more customized and effective management interventions. To find out whether various teams within an organization can have different ethical cultures, we employ the differentiation perspective and conduct a survey of 180 teams from one organization. The results show that there are significant differences between the ethical cultures of teams. These differences are relevant given the different relationships that were established between high and low clusters of team ethical culture and two outcome variables (i.e., the frequency of unethical behavior and employee responses to unethical behavior). The results also show that the dimensions of ethical cultures among teams have different patterns, which indicates the usefulness of using a multidimensional scale for capturing further differences among team ethical cultures.