vii

Contents

List of Tables xii

List of Figures xviii

Acknowledgments xix

Glossary of Abbreviations and Terminology xx

1 Introduction 1 Importance of this research 1 Global culture 3 Global citizenship 3 National citizenship versus company citizenship 5 Company citizenship 5 Company citizenship as a competitive advantage 6 Key gaps in the related literature 7 Objectives of this research 8 Conclusion 9

2 Organizational Culture and Commitment 10 Organizational culture 10 Theoretical models of organizational culture 11 Values as core components of culture 16 Organizational culture as resource under the RBV theory 20 What is a resource under the RBV theory? 24 Organizational culture as a resource under the RBV theory 25 Organizational culture and corporate performance 26 Organizational commitment as the index of

corporate performance 28 Organizational commitment 29 Relationship between culture and commitment 33 Conclusion 36

3 Relationship between the Headquarters and Subsidiaries in Multinational Companies 37 Types of multinational companies 40 Strategy–structure literature 42 HQ–subsidiary-relationship literature 43

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viii Contents

Globalization/localization issues 46 Role of subsidiaries 46 Centralization versus autonomy issues 47 Alternative models of HQ–subsidiary relationship 48 Hierarchical versus heterarchical approaches 48 Role of culture 50 Characteristics of the management system of Japanese

multinational companies 54 HQ–subsidiary management in Japanese

multinational companies 55 Keiretsu and its impact on Japanese multinational companies 57 Organizational culture and its impact on commitment 58 Characteristics of the organizational culture of

Japanese multinational companies 60 Characteristics of the organizational commitment of Japanese

multinational companies 61 Thailand: general characteristics of organizational culture 62 India: general characteristics of organizational culture 63 Impacts of culture on commitment in Indian and

Thai organizations 65 Transmission of culture from the HQ to the

subsidiaries in multinational companies 65 Conclusion 69

4 Methodology 70 Design of data collection and survey 70 Brief characteristic of Shogun, the selected Japanese

multinational company 72

5 Model and Measurement Instrument 76 Models of organizational culture 76 Models of organizational commitment 80 Models on the relationship between organizational culture

and organizational commitment 83 Measurement of organizational culture 84 Measurement of organizational commitment 87 Research model 93 Measurement instrument 94 Characteristics of the sample scale 94 Measurement instrument: Organizational Culture

Assessment Scale (OCAS) 95

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Contents ix

Measurement instrument: Organizational Commitment Scale (OCOMAS) 99

6 Organizational Culture and Organizational Commitment in the Parent Unit in Japan 104

Analysis of the factors comprising organizational culture and organizational commitment 105

Characteristics of the sample of the parent unit, Japan 105 Descriptive statistics: organizational culture 106 Reliability analysis: OC in HQ, Japan 108 Composition of the OC as unobserved variable 109 Covariance and correlation analyzes: OC in HQ, Japan 110 Analysis of variance: OC in HQ, Japan 111 Factor analysis: OC in HQ, Japan 112 Entrepreneurship and supportiveness: important

characteristics of organizational culture in Japan 114 Statistical analysis of organizational commitment (OCOM) in

HQ, Japan 118 Descriptive statistics: OCOM in HQ, Japan 119 Composition of the OCOM as unobserved variable 121 Covariance and correlation analyzes: OCOM in HQ, Japan 122 Analysis of variance: OCOM in HQ, Japan 123 Factor analysis: OCOM in HQ, Japan 124 Interrelationship between organizational culture and

organizational commitment in Japan 129 Results of multiple regression analysis: HQ, Japan 129 Results of Structural Equation Modeling (SEM): Japan 134 Results of testing model for convergent and divergent validity

in HQ, Japan 138 Conclusion 138

7 Study B: Analysis of the Organizational Culture and Organizational Commitment in the Thai Subsidiary 140

Factors comprising the organizational culture of the Thai subsidiary of the Japanese MNC 141

Reliability analysis: OCOM in Thai subsidiary 151 Analysis of variance 154 Interrelationship between organizational culture and

organizational commitment in Thai subsidiary 158 Structural equation modeling (SEM): Thai subsidiary 164 Conclusion 167

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x Contents

8 Study C: Organizational Culture and Organizational Commitment in the Indian Subsidiary 169

Organizational culture of the Indian subsidiary 171 Analysis of variance: OCOM in the Indian subsidiary 184 Interrelationship between organizational culture and

organizational commitment 189 Results of Structural Equation Modeling (SEM):

Indian subsidiary 193 Conclusion 197

9 Transmission of Culture-commitment from HQs to Subsidiaries: A Multilevel Model 199

Purpose of multilevel modeling 199 Structural equation modeling: organizational culture in

HQ, Japan, and Thai subsidiary 203 Organizational culture: comparison between HQ, Japan, and

Indian subsidiary 206 Organizational commitment (OCOM): comparison

between HQ, Japan, and Thai subsidiary 210 Organizational commitment (OCOM): Comparison

between HQ, Japan, and Indian subsidiary 213 Test of Equality of covariance matrices: OCOM: HQ,

Japan, and Indian subsidiary 214 Comparison of organizational culture:

Thai and Indian subsidiaries 216 Article I. Test of equality of covariance matrices for six value

components of organizational commitment: Thai and Indian subsidiaries 218

Conclusion 220

10 Discussion 222 Philosophical position of the research: positivism 223 Organizational culture in the parent unit in Japan 226 Transmission of culture-commitment from HQ to

subsidiary operations 237 Comparison of organizational cultures: parent unit in

Japan versus Indian subsidiary 239 Organizational commitment: comparison between

HQ in Japan and the Indian subsidiary 245 Culture–commitment relationship in the Thai subsidiary 248 Conclusion 254

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Contents xi

11 Conclusion 255 Research achievements 255 Contributions of this research 256 Empirical contributions of the research 260 Contributions to practice 260

Appendices 267

References 296

Index 329

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1

1 Introduction

Importance of this research

Rapid globalization of the world economy brings profound changes in the international business of the main manufacturing organizations. Companies are facing fierce international competition. They try to take advantage of the growing opportunities offered by the international market. These motives are driving companies of the industrialized nations to add more countries to their list of possible locations for trade and profit, particularly in East Asia.

Multinational companies (MNC) today are central agents promoting globalization. With the increasing globalization of business, the level of economic activity of the World now depends upon this form of organi-zation (Andersson and Pahlberg, 1996; Basu, 2000; Birkinshaw and Hood, 1998; Birkinshaw, Hood and Young, 2005; Child, Faulkerner and Pitkethley, 2000). Thus, the MNCs are becoming important subjects for scholarly study because their influence is growing along with interna-tionalization of production in the era of globalization.

Operating across products and markets, nations and cultures, MNCs face diverse problems and complex situations and, therefore, create the most complex form of organization in existence. In the era of globali-zation, the issues concerning transmission of organizational culture (OC) from headquarters (HQ) of a multinational company to its subsidi-aries are becoming increasingly important (Ouchi and Jaeger, 1978; Andersson, Forsgren and Holm, 2002).

The transmission of organizational culture from headquarters to subsid-iaries appears to be central to the mechanism for managing overseas subsidiaries in multinational companies (Birkinshaw and Hood, 1998; Andersson, Forsgren and Holm, 2002; Basu, 2010). The transmission of

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2 Organizational Culture and Commitment

organizational culture is an important part of a coordination mechanism between headquarters and subsidiaries. During the process of transmit-ting culture, a parent unit of a company should successfully transfer the set of the core values that compose its organizational culture from their parent unit to the subsidiaries worldwide.

In every important multinational company, there are some specific espoused values which form their organizational cultures and create values, which in turn may shape the commitment of its employees. These commitments are the indicator of the successful performance of a company because creation of commitment leads to a company’s success. We can call this interrelationship between culture and commit-ment company citizenship . This company citizenship can be transmitted by a multinational company from one part of the globe to another through the transmission of its corporate management and operations management systems, as a part of the company’s strategic management process. Formation of company citizenship, based on the firm’s organi-zational culture, creates unique competitive advantages for a multina-tional – advantages which are part of its international strategy. This is a new theoretical development because it is different from the existing theoretical explanations of the transmission of values from the social or national environment to the organizational environment (O’Reilly, Chatman and Caldwell, 1991; Cameron and Quinn, 1999).

This concept of company citizenship is directly opposed to two very important theories put forward in recent years. Freedman (2006) has coined the term ‘Flat World’ to describe a world in which people have the ‘Jet-Set Culture’ (Triandis, 2006) of the high Anglo-American executive class, with similar language, education, tastes and preference but with varied citizenships and nationalities. Emergence of this global culture is the result of the globalization process that has been in progress since 1990. This has created a new breed of managerial class whose culture is global, not national. If that is the case, organizational systems that were developed using national characteristics are undergoing changes to include global characteristics. There is also the powerful argument of Hofstede (1980), who thinks organizational culture is related to the national culture of the country in which the company is located, and MNCs cannot avoid the strong influence of the national culture of the host country.

This book, drawing upon the experiences of a major Japanese multi-national automobile company (henceforth called Shogun, to maintain confidentiality) has examined the core values of management in Japan, India and Thailand in order to demonstrate that the theories of Freedman

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Introduction 3

(2006) and Hofstede (1980) are not exactly valid. Company citizenship can be formed even in a country with a very different national culture because the strong organizational culture of a multinational company, which gave rise to the values of corporate management and operations management, can override differences in national culture between the home and the host countries of a multinational company. As there different multinational companies with different organizational cultures, there would be different company citizenships for different multinational companies rather than just one Anglo–American ‘Jet-Set’ global culture.

Global culture

Kroeber and Kluckhohn (1952) has defined culture as shared standards operating procedures, unstated assumptions, practices, tools, myths, art, kinship, norms, values, habits about sampling the environment and shared meanings. There is the opinion of Hofstede (1980) that national cultures are different from each other and as a result, different organiza-tional cultures can be formed. However, the belief remains that globaliza-tion has given rise to a new ‘Jet-Set’ corporate culture (Triandis, 2006). According to this, MNCs are simply propagating the corporate culture based on Western, mainly American, values and that other cultures would thus be swept away. The main implication is that ultimately there would be one global corporate culture instead of separate individual cultures.

The ‘Jet-Set’ culture emphasizes individualism, self-reliance, competi-tion, uniqueness, hedonism, and emotional detachment within a group. Vertical individualistic culture (U.S. corporate culture) values competi-tiveness. Horizontal individualistic culture (Australia, Sweden) de-em-phasizes hierarchical differentiations (Triandis and Gelfand, 1998). ‘Jet-Set’ culture belongs to an emergent global culture that promotes primarily the vertical individualistic U.S. corporate culture irrespective of national boundaries (Clark and Knowles, 2003). This global culture consists of people who are attached to other members of this culture through a process of self-selection. Core values of global managers are not derived from ethnic groups or national origins but from a cultural cross-pollination (Bird and Stevens, 2003).

Global citizenship

The assumptions of a homogeneous global culture are question-able. U.S. corporate values are the values of the dominant group in

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4 Organizational Culture and Commitment

United States, which may not be shared by everyone in American society. While national culture is heterogeneous, there are hetero-geneous cultures in the world that may cross national boundaries. This creates a number of global cultures for affiliated groups, but not a single global culture (Lincoln and Kalleberg, 1996). The second issue is whether adaptation of a particular managerial practice (for example, ‘just-in-time’ from Japan or ‘downsizing’ from the United States) means cultural adaptation of ‘software of the mind’ or values inherent in these practices (Shingo, 1985). These affect the culture at the level of ‘deep mental programming’ referred by Hofstede (2002).

These authors argue that, in the modern business world, not coun-tries, but multinational companies are establishing their own cultures over the globe. The corporate cultures of leading multinationals are forming their own company citizenships within their borders and globally spreading their way of doing things.

That multinational organizational culture is formed by major values introduced by the founder/top management of that corporation, and may or may not be influenced by the values of the country in which that MNC is operating. That corporate global culture, in turn, forms company citizenship, a new organizational manifestation in the era of globalization. Some successful multinational companies are tran-scending national cultural differences by developing a common pattern of drivers of business practices through the formation of company citi-zenship. This book aims to describe the components of company citi-zenship and to provide evidence of its existence.

Company citizenship in this research refers to a relationship between organizational culture and organizational commitment, working through corporate management and operations manage-ment systems. O’Reilly, Chatman and Caldwell (1991) have identi-fied certain dimensions of values of organizational culture. Basu (1999) has pointed out the values of the corporate management system in Toyota, which is considered the role model for Japanese multinational companies. Shingo (1985) has defined values at the core of the operations management system of Toyota. These values are: innovation, stability, respect for people, outcome orientation, detail orientation, team orientation and determination. These values are closely related to what Triandis (2006) described as ‘collectivist’ values, which should give way to the ‘individualistic’ values in a fully ‘globalized’ value system according to the supporters of the ‘Jet-Set’ culture.

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Introduction 5

National citizenship versus company citizenship

There are important differences, as mentioned by Triandis (2006), between the Western (individualist) and Eastern (collectivist) organi-zational cultures and, as a result, values of the corporate management system and operations management system in Eastern and Western companies also differ. The cultural value system in Japan promotes hard work and attention to detail, group orientation and consensus orien-tation (Lincoln and Kalleberg, 1985). It focuses on conflict avoidance, importance of long-term relationships, and uniformity. The end result is a very high level of loyalty for the company. U.S. corporate culture, on the other hand, promotes more communication, coordination, and short-term performance evaluations.

Hofstede (1980) concluded that the organizational culture created in the context of one specific national culture may not be implemented in a different nation because of the variations in national cultures. Recently the GLOBE project (House, Hanges, Javidan, Dorfman and Gupta, 2004) has tried to categorize nations according to their leader-ship cultures and organizational cultures. In Hofstede’s analysis, national culture and national characteristics form organizational culture.

However, the alternative argument proposed in this book is that organi-zational culture, along with corporate management and operation manage-ment systems, as its components, can be transmittable from one nation to another by a multinational company. If a company can influence its employees with a strong organizational culture it can override influences of national characteristics and can have a superior organizational culture throughout the organization irrespective of national boundaries.

From the above analysis we proceed to the concept, ‘company citizen-ship’. Company citizenship does not depend on nationality but on the organizational culture of a company irrespective of nationality.

Company citizenship

Company citizenship can be defined as the reflection of the reason for the existence of the company and its organizational culture. Values of the organizational culture – those proposed by founders of a company and developed by top managers – define super-ordinate goals, visions, and the purpose of the company, which binds the corporation to its members in spirit (Basu, 1999; Pascale and Athos, 1981). Leadership defines these features in practical terms in order to disseminate these to its employees. These provide guidelines for decision-making, coordination, evaluation:

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6 Organizational Culture and Commitment

in other words, for ways of doing things, or, the corporate management and operations management systems.

Corporate management and operations management systems, through their beliefs and assumptions, influence behavior and create values, which in turn affects decisions and actions of the members of the organization and creates a citizenship or membership. Company citizenship is formed for a multinational enterprise first in its home territory but it spreads to the subsidiaries in various parts of the world, creating a common organizational culture throughout. Company citi-zenship differs from one company to another, as the organizational culture of each company is different from that of another.

Thus, this book argues that instead of a global culture, which is supposed to produce a common global citizenship, in reality we can observe a common company citizenship for a specific multinational companies throughout the world. Moreover, there can be as many company citi-zenships as there are multinational companies. Thus, in the real busi-ness world in the era of globalization, instead of monolith-type of single global culture composed by Western values, or a fusion-type composed by multiple national cultures, there will be a multiplicity of corporate cultures, which form company citizenships, which differ from each other as the organizational culture of Toyota differs from that of Ford.

Company citizenship as a competitive advantage

Continuous growth of a company is needed for the preservation of the values of organizational culture. Continuous progress and respect that can be gained by being associated with a company with continuous growth are the end objective of the employees. A deep religious value to perpetuating growth is also the objective of corporate growth. Employees think and operate with an outlook for the long-term prospects of the organization and for harmony within the work place and the broad social environment. These feelings lead them to develop a family feeling within the work place and responsibility towards fellow employees and the community at large. They believe they have a responsibility towards the organization and the local and global societies, as a multinational company is a global organization.

Irrespective of location, the Japanese multinational company that is the subject of this research (the company we call Shogun) is striving to instill these values into its employees across the globe, creating an organ-izational citizenship that would carry the essential values of Shogun as a global organization. The fear of loss of face (due to non-achievements

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Introduction 7

of its objectives) to the employees, Japan, and the global community are the motives for Shogun’s efforts to mould every employee, irrespective of nationality, into a company citizen. The way to do that is to transfer the original organizational culture from the parents to the subsidiaries. This book analyzes the organizational culture in the parent operation of this Japanese automobile company with subsidiaries in overseas coun-tries, and examine whether these transmission is successful or not.

Organizational culture is viewed traditionally as an attribute of the company, but not as its important strategic resource; this is due to the fact that it is questionable whether and how culture influences perform-ance. Therefore, the classic question, one that Barney raised (1986) in relation to Porter’s theory of the competitive advantage of a firm (1980, 1985) – whether culture can be a source of competitive advantage and, there-fore, can be regarded as a strategic resource of a company – still remains open (Barney, 1986, 1991, 2001; Barney and Clark, 2007).

Organizational culture is an important resource of an MNC because organizational culture is unique and hard to imitate s and may influence the overall performance of the company. The transmission of organiza-tional culture from the parent operation (HQ) to the subsidiaries appears to be the central mechanism for managing overseas subsidiaries in multina-tional companies (Basu, 2010). This research views transmission of organi-zational culture as an important part of the coordination mechanism between headquarters and subsidiaries. During the cultural transmission, the parent unit of a company should successfully transfer the set of the core values that compose its organizational culture to the subsidiaries world-wide in order to enhance the firm’s overall performance. Organizational commitment can be regarded as one of the important intangible indices composing the concept of performance. From the perspective of the rela-tionship between organizational culture and performance, this research examines whether – under the influence of organizational culture – a level of commitment similar to that in the HQ can be formed in subsidiaries.

Key gaps in the related literature

The literature does not provide much rigorous analysis of: Japanese multinational companies and the transmission mechanism of organi-zational culture to foreign locations; how the subsidiaries adapt foreign organizational culture transmitted from the HQs; and what is the effect of that transmission on employees’ commitment. So far, exploratory research has been limited to a few American and European multina-tional companies (Martinez and Jarillo, 1989, 1991; Ferner, 2000).

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8 Organizational Culture and Commitment

Despite the fact that there are many research efforts in the literature of ‘International Business’ on Japanese MNCs and their subsidiaries worldwide, there is no research that provides a mewthodological frame-work to compare and contrast the parent company with the subsidiaries located in culturally similar and culturally distant host countries. Also, the methodological and conceptual frameworks to evaluate the trans-mission of culture have not been established so far. Thus, a study is vital to provide researchers with a much-needed methodological framework for analysis of the nature of the organizational culture and commitment and of their interrelationship in the context of multinational compa-nies, particularly in Asian MNCs.

The value-components are frequently used in the analysis of the nature of organizational culture (Rockeach , 1973, 2000; Schein, 1992, 2010; Cameron and Quinn, 1999; Schwartz, 1994, 1996; O’Reilly, Chatman and Caldwell, 1991) and organizational commitment (Mowday, Porter and Steers, 1979, 1982; Meyer and Allen, 1984, 1991), but research on exact value-components of organizational culture and organizational commitment is rare, particularly in relation to Japanese MNCs. Research on the relationships between the value-components of organizational culture and commitment is very rare as well. Thus, research on how the organization promotes and transmits these values across national cultural boundaries is needed. Table 1.1 provides a summary of the information regarding the key gaps in the related literature.

Objectives of this research

The scope of this book is to examine the transmission of organizational culture through the level of value-components and how that can affect organizational commitment. This research aims to investigate what are the main value-components forming organizational culture. Related

Table 1.1 Key gaps in the related literature

1. What are the main factors composing the organizational culture and organizational commitment in a multinational company?

2. Is it possible to transmit organizational culture from the parent unit to the overseas subsidiaries to create the same quality of organizational commitment in the subsidiaries?

3. Can organizational culture be a source of competitive advantage and, therefore, should it be regarded as a valuable strategic resource of a multinational company?

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Introduction 9

to the above the research objectives are three research questions to be analyzed in this book as described in Table 1.2.

The purpose of this study is to provide some answers to these questions.

Conclusion

Globalization has created competition among the multinational firms for domination of the global market. Multinational companies want to spread their activity to look for new markets, and at the same time they want to find the cheapest place in the world to produce. That has stimulated them to consider various options to coordinate their world-wide activities by having a smooth relationship between HQs and their subsidiaries spread across the world.

As a result, the managers of multinational companies are expected to coordinate these subsidiaries so as to integrate them into a proper strategy to create unique resources to be used against their rival compa-nies. However, the most difficult part is to find a road map to implement such a strategy. Thus, the issues regarding globalization/localization (Bartlett and Ghoshal, 1988, 1989; Harzing, 1999, 2000) and centrali-zation/autonomy (White and Poynter, 1984; Andersson and Pahlberg, 1996) in relation to the HQ–subsidiary relationship are becoming extremely important. As the one of the drivers of a firm’s performance, organizational culture (particularly the successful transmission of culture from HQs to subsidiaries) plays a crucial role in the coordination and implementation of the appropriate strategy of multinational compa-nies, and thus, should be regarded as an important strategic resource of a company.

Table 1.2 Research questions

1. What are the precise factors composing the concept of organizational culture and organizational commitment in a Japanese multinational company?

2. Is it possible to transmit organizational culture from the parent unit of a Japanese MNC to its overseas subsidiary located in the host country, Thailand, which is culturally similar to Japan? How would that affect the characteristics of organizational commitment in the subsidiary?

3. Is it possible to transmit organizational culture from the parent unit of a Japanese MNC to its overseas subsidiary located in the host country, India, which is culturally distant from Japan? How would that affect the characteristics of organizational commitment in the subsidiary?

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329

Index

acculturation, 16, 53, 208, 230, 238–40, 244, 248, 251, 262, 265

achievement, 18, 78, 98, 110, 115, 229, 234

adaptability hypothesis, 26, 257adhocracy culture, 19, 26affective autonomy, 18affective commitment, 29, 32,

81, 82–4aggressiveness, 18–19, 85American multinationals, 3–6, 41,

42, 66, 68, 246, 253–4American-style organizations, 51–2analysis of variance, 111–12,

123–4, 145–6, 154, 176–7, 181–2, 184–5

artifacts, 12ascription, 18assertiveness, 62, 65assumptions, 16attention to detail, 85attitudinal commitment, 92authority, 231autonomy

affective, 18vs. centralization, 47–8intellectual, 18of subsidiaries, 38, 43,

47–9, 254

Balanced-Scorecard approach, 28–9

Bartlett’s test, 128, 150, 157, 179bases of commitment, 80, 83behavioral patterns, 11, 12, 16, 77,

92, 227, 256–7Box’s M Test, 202, 212,

217, 219British multinationals, 41Buddhism, 59, 60, 63

bureaucratic controls, 42, 43, 62–3, 231

Bushido, 59

calculative commitment, 32–3, 81, 92center of excellence (COE), 46–7, 49centralization, 42, 43, 63–4

vs. autonomy, 47–8citizenship

company, 2–7global, 2–4national, 5

Clan type organization, 19climate, 257Clinical Research Model, 76cohesion, 32collectivism, 4, 5, 17, 18, 27, 35, 62,

68, 83, 231, 244, 255commitment, see organizational

commitmentcommunalities matrix, 113, 124, 154,

231, 232company citizenship, 2–4

as competitive advantage, 6–7defined, 5–6vs. national citizenship, 5

company values, 2, 25–7, 33, 52, 78–80, 235, 246, 251, 357

Comparative Fit Index (CFI), 165competency, 18Competing Values Framework (CVF),

19–20, 79competitive advantage, 23, 65–6, 230

company citizenship as, 6–7organizational culture and, 13, 19,

21, 25–6, 250–1, 252, 255competitive culture, 18competitive forces, 50component matrix, 115–16, 126–7,

148, 156, 178, 187–8Comte, Auguste, 224

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330 Index

conceptual research model, 93–4conflict-avoidance, 66consensus orientation, 66conservation, 18consistency hypothesis, 26, 257construct validity, 74continuance, 32continuance commitment, 32,

82, 90continuous improvement

(Kaizen), 22, 55, 114–15, 170, 229

control, 32cooperative culture, 18, 27coordination

administrative means of, 54mechanisms, 2, 7, 39, 53,

251–2, 264social, 66

core competencies, 21–3corporate culture, see organizational

culturecorporate performance

factors in, 28–9organizational commitment

and, 28–9organizational culture and, 26–8

corporate strategy, see strategycorrelation matrix, 110–11,

117, 122–3, 144–5, 152–3, 167, 175–6, 183–4, 196

covariance matrix, 110–11, 117, 122–3, 144–5, 152–3, 174–6, 183–4, 212–15, 217–18

Cronbach Alpha, 108–9, 117, 120, 143, 151–2, 182–3

cultural adaptation, 4see also acculturation

cultural differences, 251cultural distance, 172cultural diversity, 68culture

see also organizational cultureadhocracy, 19, 26aggressive, 18–19behavioral patterns of, 77competitive, 18cooperative, 18, 27

family, 62global, 2, 3, 68, 264historical view of, 10homogeneity of, 3–4, 60,

68, 73, 230measurement of, 76–7models of, 77national, 2–4, 17, 27,

58–60, 66, 68, 222–3, 235, 251–2

personal beliefs and, 77–8psychological view of, 11role of, 50–4sociological view of, 11strong, 27, 58–9value level of, 77, 228values and, 16–20, 77–8

data collection, 70–4, 141, 171decentralization, 42decisiveness, 18, 97, 109, 110, 111,

116, 117, 118, 130, 135, 142, 143, 144, 148, 149, 177, 197, 246, 248, 264

determinism, 224, 255discriminant analysis, 75, 201,

206–8, 210–11, 212, 214, 216, 220–1, 239, 243, 245

downsizing, 4, 40duty, 80dynamic capabilities, 22, 23

economic environment, 22economies of scale, 50egalitarian compromise, 18ego orientation, 103, 120, 182,

240, 242Eigen values, 113–14, 125–6,

154, 156, 177–8, 185–7, 203, 212, 215, 218, 220

emotional attachment, 100, 120, 128, 159–61, 166, 190–1, 241, 242, 244, 248, 249–50

emotional ground, 12emotions, 18empiricism, 224, 255employee-organization

relationship, 32–3, 55

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Index 331

employees, 22commitment of, 29, 81, 225–6. see

also organizational commitmentIndian, 64–5Japanese, 65, 66Thai, 65

empowerment, 64, 245, 246, 249enculturalization process, 182entrepreneurship, 38, 96, 114–18,

177, 197, 229, 232, 234, 247, 250, 264

environment attachment, 101, 128, 130–1, 241, 244, 246–7

ethical values, 35, 59, 82ethnocentric companies, 40European multinationals, 41, 52, 246expected cross-validation index

(ECVI), 166, 194exploratory factor analysis, 112external competition, 50external environment, 22external validity, 74extrinsic rewards, 36

factor analysis, 112–14, 116–18, 124–8, 146–50, 154–8, 177–82, 185–9, 229, 231, 232, 233–4, 242

factor scores regression, 166, 197family culture, 62family-run businesses, 63–4femininity, 17first-order coordination

mechanisms, 53, 251Flat World, 2foci of commitment, 80, 83formal cultural coordination, 39–40

global citizenship, 2–4global companies, 41, 43global culture, 2, 3, 68, 264globalization, 1, 9, 40, 46, 69, 169globalization school, 68GLOBE project, 5Goodness of Fit statistics, 205growing together philosophy, 169–70

harmony, 18Harvard Multinational Enterprise

Project, 39

headquarters (HQ), 245coordination mechanisms of, 7, 39,

53, 251–2, 264organizational commitment at,

118–28, 210–16, 241–4organizational culture of, 60,

104–18, 226–31relationship between culture and

commitment at, 129–38, 246–8relation with subsidiaries, 37–69transmission of culture from, 1–2,

7–9, 54, 65–8, 199–221, 237–8heterarchy, 48–50hierarchy, 18, 19, 48–50, 63–4homogeneity, 3–4, 60, 68, 73, 230human resources, 27, 63, 81human resources management, 39,

40, 66, 170, 181, 229–30, 232–3, 245, 250, 262–3

Indianational culture, 222–3, 233, 235organizational culture, 63–5

Indian multinationals, 64–5Indian subsidiary

analysis of variance, 176–7, 181–2characteristics of, 171compared with Thai subsidiary,

215–20correlation matrix, 175–6covariance matrix, 175–6data collection, 171descriptive statistics, 171–3factor analysis, 177–82HQ and, 169–71multiple regression analysis,

189–93organizational commitment at,

182–9, 213–16, 218–20, 244–5organizational culture in, 169–82,

206–10, 215–18, 233–7, 239–40relationship between culture and

commitment at, 249–50reliability analysis, 173–4structural equation modeling

(SEM), 193–7value components, 171–3

individualism, 3, 4, 5, 17, 62, 64, 68, 83, 231

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332 Index

individual values/beliefs, 257informal cultural coordination, 39innovation, 85, 96, 177, 197, 246instrumental values, 17, 78intellectual autonomy, 18internal competition, 50internal environment, 22internal validity, 74intra-firm trade, 49intrinsic motivation, 83involvement, 257involvement/participation

hypothesis, 26

Japanese culture, 5, 27, 58–60, 66, 222

Japanese multinationals, 40–2characteristics of, 105–6coordination mechanisms of, 53,

251–2cultural transmission by, 1–2,

7–9, 54, 65–8, 199–221, 222–3, 252–3

HQ-subsidiary management in, 55–7

Indian subsidiaries of, 169–98, 215–20

Keiretsu system, 55, 57–8, 61–2, 70, 252, 263–4

management systems, 54–5, 226–7, 252–3

organizational commitment in, 61–2, 118–28, 210–16, 242–5

organizational culture of, 58–60, 66, 104–18, 226–31, 238–40

relationship between culture and commitment in, 129–38, 246–8

Thai subsidiary of, 140–67, 215–20U.S. subsidiaries of, 46, 57

Japanese-style organizations, 51–3Jet-Set culture, 2, 3, 4Jinjibu, 231, 248, 262–3job satisfaction, 81, 82, 84, 246just-in-time, 4

Kaiser criterion, 113Kaiser-Meyer-Olkin (KMO)

statistic, 117, 118, 128, 149–50, 157, 179

Kaizen, 22, 55, 114–15, 229karma, 64Keiretsu system, 55, 57–8,

61–2, 70, 253, 263–4knowledge, 23, 39

latent variables, 112, 137–8, 146, 165–7, 187, 194–6, 200–1, 232, 243–4, 257

lean production, 55localization, 9, 43, 46long-term orientation, 17loss of face, 6–7, 61loyalty, 66, 80

macro-value sub-system, 17–18management

human resources, 39, 40, 66, 170, 181, 229–30, 232–3, 245, 250, 262–3

Japanese multinationals, 54–7, 226–7, 252–3

strategic, 260–2by values, 227–8

managerial class, 2managers

coordination by, 50interaction among, 49personalities of, 79psychological assumptions

of, 77senior, 245social networks of, 54

market culture, 26market scope, 254market share, 29Market type organization, 19masculinity, 17, 62, 64, 234measurement, 76

of culture, 76–80instruments, 94of organizational commitment,

81–2, 87, 90, 92, 99–103, 118–28

of organizational culture, 84–7, 95–9, 105–18

mergers and acquisitions, 79, 80meso-value sub-system, 17, 18–19methodology, 70–5

PROOF

Index 333

micro-value sub-system, 17, 18mindset, 12mission, 11mission hypothesis, 26, 257Model Chi-Square test, 195models

of organizational commitment, 80–3

of organizational culture, 76–80on relationship between

organizational culture and commitment, 83–4

research model, 93–4motivational roots, 12multi-domestic companies, 43multilevel modeling

of cultural transmission, 199–221procedure of analysis, 200–1purpose of, 199–200

multilevel research model, 94multinational companies (MNCs),

1, 4, 9see also Japanese multinationalscompetitive advantage, 65–6evolution of, 37globalization/localization

issues, 46literature on, 44–5management of, 39–40research on, 37–40subsidiary-headquarter

relationships, 37–69types of, 40–2, 51–2

multiple regression analysis, 129–34, 158–63, 189–93, 230, 246–7

Myers-Briggs Type Indicator, 77

national citizenship, 5national culture, 2–4, 17, 27, 58–60,

66, 68, 251–2India, 222–3, 233, 235Japan, 222Thailand, 222–3

network-based systems, 42non-imitable criterion, 24non-substitutable criterion, 24Normalised Normed Fit Index (NNFI),

165–6, 195–6normative commitment, 32, 83–4

Normed Fit Index (NFI), 165, 195norms, 32

operationalism, 224, 255opportunism, 64, 65, 241organizational citizenship behavior

(OCB), 265–6organizational commitment, 40,

245, 252affective, 29, 32, 81, 82–4analysis of variance, 123–4,

154, 184–5bases of, 80, 83calculative, 32–3, 81, 92communalities matrix, 154comparison between Japanese HQ

and Indian subsidiary, 213–16comparison between Japanese HQ

and Thai subsidiary, 210–13comparison of, between Indian and

Thai subsidiaries, 218–20comparisons of, 243–4component matrix, 126–7,

156, 187–8composition of, as unobserved

variable, 121–2concept of, 80conceptual studies on, 30–1continuance, 32, 82, 90corporate performance and, 28–9correlation matrix, 122–3,

152–3, 183–4covariance matrix, 122–3,

152–3, 183–4culture and, 33–6, 58–60, 65,

83–4, 129–38, 158–67, 189–97, 222, 245–50, 260

defined, 29, 32–3descriptive statistics, 150–1,

182–3factor analysis, 124–8,

154–8, 185–9Indian subsidiary, 64–5, 182–9,

213–16, 218–20, 244–5, 249–50in Japanese multinationals, 61–2,

118–28, 129–38, 210–16, 241–5, 246–8

measurement of, 81–2, 87, 90, 92, 99–103

PROOF

334 Index

organizational commitment – continued

models of, 80–3at parent unit, 118–28,

210–16, 241–5reliability analysis, 120–1, 151–2research on, 81statistical analysis of, 118–28Thai subsidiary, 150–8, 158–77,

210–13, 218–20, 243–4, 248–9value components, 91, 119–20,

150, 182–3, 240–1Organizational Commitment

Assessment Scale (OCOMAS), 99–103, 228, 241–2

Organizational Commitment Questionnaire (OCQ), 82, 83, 87

organizational cultureanalysis of factors comprising, 105analysis of variance, 111–12,

145–6commitment and, 33–6,

58–60, 65, 83–4, 129–38, 158–67, 189–97, 222, 245–50, 260

comparison of, between Indian and Thai subsidiaries, 215–18

comparisons of, 201–3, 238–40competitive advantage and, 13, 19,

21, 25–6, 250–1, 252, 255component matrix, 115–16composition of, as unobserved

variable, 109–10concept of, 10–11, 76, 104, 226corporate performance and, 26–8correlation matrix, 110–11, 144–5covariance matrix, 110–11, 144–5defined, 11descriptive statistics, 106–8, 142–3dynamic capabilities and, 23entrepreneurship and, 114–18factor analysis, 112–14, 116,

117–18, 146–50factors comprising, 141–2global, 68, 264India, 63–5Indian subsidiary, 169–82, 206–10,

215–18, 233–7, 239–40, 249–50

Japan, 66in Japanese multinationals, 58–60,

66, 104–18, 129–38, 226–31, 238–40, 246–8

measurement of, 76–80, 84–7, 95–9, 105–18

models of, 76–80national culture and, 2–3, 68RBV theory and, 20–6reliability analysis, 108–9, 143–4research on, 7–8as resource, 25–6role of, 50–4of subsidiaries, 140–50, 169–82,

203–10, 231–7, 238–9, 251–2supportiveness and, 114–18Thailand, 62–3, 65Thai subsidiary, 140–50, 203–5,

215–18, 231–3, 238–9theoretical models of, 11–16theory of, 256–7traits of, 257transmission of, 1–2, 7–9, 54, 65–8,

199–223, 237–8, 250–3, 265U.S., 3, 5, 66, 68value components, 4, 16–20, 88–9,

106–8, 142–3, 225–6, 228–9, 230, 246–8, 257

Organizational Culture Assessment Scale (OCAS), 95–9, 228

Organizational Culture Profile (OCP), 26, 80, 84–9, 95

Organizational Description Questionnaire (ODQ), 80

organizational structure, 28organizational values, 86outcome orientation, 85outsourcing, 40

parent company, see headquarters (HQ)

parsimony, 224, 255passive culture, 19, 27people orientation, 85performance, 232, 233, 234

commitment and, 82corporate, 26–9

performance orientation, 98personal beliefs, 77–8

PROOF

Index 335

personal values, 86person-organization fit, 85–6polycentric companies, 41positivism, 223–4, 255power distance, 17, 64preciseness, 99, 106, 107,

108, 109, 110, 111, 116, 117, 133, 135, 142, 143, 144, 145, 146, 148, 149, 159, 172, 173, 175, 229, 232, 233, 234

productivity, 35–6, 248product standardization, 43Protestant work ethic, 81

Q-methodology, 85

rare criterion, 24rational attachment, 102, 127, 133–4,

241, 242, 243, 248reciprocal independence, 42reliability analysis, 108–9, 143–4,

151–2, 173–4research model, 93–4research study

achievements of, 255construct validity, 74contributions of, 256–63external validity, 74internal validity, 74limitations of, 263–4major findings of, 250–4methodology, 70–5statistical conclusion validity, 75suggestions for future, 264–6

Resource Based View (RBC) theory, 20–6

resources, 21–6, 38respect, 170return on investment, 29risk, 38risk aversion, 62–3, 64risk taking, 85Rockeach Value Survey (RVS),

17, 77–8root mean square residuals

(RMSR), 196rotated component matrix, 114, 116,

117, 127, 148, 156, 178, 187–8

sacrifice, sense of, 102, 127, 132–3, 162–3, 191–2, 244, 247–8

sample scale, 94–5Samuari ethics, 59Schwartz Value Survey (SVS), 78second-order coordination

mechanisms, 53, 251security, 97, 246, 247, 248, 264self, sense of, 227self-interest, 233, 234Shintoism, 60short-term orientation, 17social coordination, 66Sphericity, 117stability, 85, 97, 247, 248standardized root mean square

residual (SRMR), 166, 196strategic management, 260–2statistical conclusion validity, 75Stockholm School, 39strategic management, 260–2strategy, structure and, 38–9, 42–3strong culture, 27, 58–9structural equation modeling (SEM),

77, 112, 134–8, 164–7, 193–7, 200–1, 203–5, 208–10, 220, 230, 246, 247, 250

structural regression, 247–8structure, 38–9, 257

strategy and, 38–9, 42–3subcultures, 12–13, 226–7subsidiaries

see also Indian subsidiary; Thai subsidiary

autonomy of, 38, 43, 47–9, 254culture and, 50–4efficiency of, 38hierarchical vs. heterarchical

approaches to, 48–50management of, 41–2network context, 55, 57–8, 61–2organizational commitment in,

150–8organizational culture of, 140–50,

169–82, 203–10, 231–7, 238–9, 251–2

relation with HQ, 37–69role of, 46–8strategy and, 38

PROOF

336 Index

subsidiaries – continuedstructure of, 38–9transmission of organizational

culture to, 1–2, 7–9, 54, 65–8, 199–223, 237–8, 252–3

supply networks, 57–8, 61–2, 254supportiveness, 98, 114–18, 229,

232, 247, 249, 250, 264

task organization, 257team orientation, 85teams, resistance to, 84team spirit, 98–9, 106, 107, 109,

110, 111, 117, 133, 144–6, 148, 149, 159, 161–2, 232, 233, 234, 248, 249, 250

terminal values, 17, 78test of equality of group means, 211,

213–14, 216–17, 219Thailand

national culture, 222–3organizational culture, 62–3, 65

Thai multinationals, 65Thai subsidiary

characteristics of, 141–2compared with Indian

subsidiary, 215–20data collection, 141organizational commitment in,

150–8, 210–13, 218–20, 243–4organizational culture of, 140–50,

203–5, 215–18, 231–3, 238–9relationship between culture and

commitment at, 158–67, 248–9theory

concept of, 23contributions to, 256–7

time orientation, 64Toyota, 4, 58, 61transaction costs, 38, 54transnational companies, 43

transnational distribution channels, 49

trust, 66Tye A organizations, 55Type A organizations, 51Type J organizations, 51, 52, 53,

55, 59, 61Type Z organizations, 51, 55–6,

66, 246

uncertainty, 38uncertainty avoidance, 17, 62–3,

64, 231U.S. corporate culture, 3–5, 66, 68U.S. subsidiaries, 57

valuable criterion, 24value-added scope, 254value attachment, 101, 127,

130, 161–2, 182, 240, 242, 243, 246, 249

value-based management interventions, 227–8

values, 11Competing Values Framework

(CVF), 19–20culture and, 16–20, 77–8defined, 16ethical, 35individual, 257instrumental, 17, 78organizational, 2, 25–7, 33, 52,

78–80, 235, 236, 246, 251, 257terminal, 17, 78

value types, 78

Wilks’ Lambda, 203, 207–8, 213, 215

world nationality, 169world product mandate (WPM)

concept, 46, 48

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