What matters more? The impact of industry and organizational factors on organizational culture

Abstract

Purpose Writings on organizational culture suggest that cultural values and norms are influenced by factors at the organizational, industry, and societal levels. While the effects of societal and organizational factors have been researched extensively, those of industry factors have not received commensurate attention. This paper investigates the relative importance of industry versus organizational variables in explaining the cultural norms reported by individuals within organizations. Design/methodology/approach The effects of two industry characteristics, (growth rate and research and development intensity) and two sets of organizational factors (leadership behaviors and human resource practices) on the strength of constructive, passive/defensive, and aggressive/defensive organizational cultural norms were investigated. Findings Results of hierarchical linear modeling (HLM) analysis of survey data from 3245 respondents in 424 organizations in twelve different industries revealed significant between-organization variation but no significant between-industry variation in the three types of cultural norms measured. Furthermore, while industry-level factors were unrelated to culture, significant variance in the culture measures was explained by leadership behaviors and human resource practices (use of rewards and fairness of performance appraisal). Research limitations/implications The strength of cultural norms and expectations within an organization evolve in response to attributes specific to the organization and do not necessarily reflect industry characteristics. The results indicate that organizations using surveys to assess their cultures may learn as much (if not more) by comparing their feedback to data on organizations across a spectrum of industries as opposed to organizations exclusively in their own industry. Originality/value Most of the frameworks developed to examine and describe the cultures of organizations delineate specific dimensions or types that are assumed to be relevant to all organizations regardless of the industries within which they operate. The purpose of this paper was to explore the validity of this assumption by investigating the relative impact of industry and organizational factors on organizational culture.