The current issue and full text archive of this journal is available at www.emeraldinsight.com/1352-7606.htm CCM 16,1 Influence of national culture on trans-national alliance relationships Suku Bhaskaran and Emilija Gligorovska 44 Victoria University, Melbourne, Australia Abstract Purpose – The purpose of this paper is to analyse and review whether national culture influences organisational beliefs about and behaviours to trans-national alliance partners. Design/methodology/approach – Reviewed extant studies on national culture, organisational culture and business-to-business relationship. Using information from the literature review and key informant surveys, a survey instrument comprising of close-ended questions was developed. The questionnaire was sent to the Chief Executives Officer’s of 1,248 organisations identified through systematically selecting every third organisation in the sampling frame. Two weeks later, universal reminders were sent to all 1,248 organisations. The data from 376 fully completed questionnaires returned were analysed through exploratory factor analysis and canonical correlation analysis. Findings – National culture influences beliefs about and behaviours to trans-national alliance partners. However, beliefs and behaviours are also influenced by the complex inter-relationships between relational constructs such as trust, commitment, co-operation, dependence, communication and compatibility. Often, compatibility is not only influenced by national culture but also by the size, business activity and how the organisation is incorporated. Practical implications – Beliefs about and behaviours to trans-national partner organisations are not solely influenced by national culture. It is the outcome of complex and diverse social, political, economic and organisational factors and how these factors influence orientations to issues such as trust, commitment, co-operation and communication. Originality/value – Explores a hitherto under-researched theme on trans-national business alliances, the influence of the national culture of organisations on various relational issues discussed in business-to-business relationship studies. The study consolidates knowledge from three streams of literature (national culture, organisational culture and business-to-business relationship), often handled as disparate sources of knowledge. Keywords National cultures, Organizational culture, Business policy, Strategic alliances, International cooperation, Malaysia Paper type Research paper Cross Cultural Management: An International Journal Vol. 16 No. 1, 2009 pp. 44-61 # Emerald Group Publishing Limited 1352-7606 DOI 10.1108/13527600910930031 Introduction Product-market success in a rapidly globalising market, characterised by converging tastes, rapid adoption of new and innovative technologies, escalating fixed costs, growing protectionism and excess production capacity, is often determined not by the quality of product and service offerings alone but also by the quality of business collaborations (Parkhe, 1991; Ohmae, 1989). Unitary organisations, organisations which conduct business independently without collaborations, experience difficulties such as operational inefficiency, resource scarcity, infrastructure constraints and incapacity to pool business risks (Borys and Jemison, 1989). Increasing realisation that collaborations are critical to achieving product-market objectives has fostered a large number of studies on strategic partnership formation and development. Nearly, 70 per cent of organisational behaviour and human resource management studies make references to culture and nearly 94per cent of these studies conclude that culture influences organisational behaviour including how organisations pursue strategic alliance formation, acquisitions and mergers (Tayeb, 1994). However, a central theme in inter-organisational research, particularly studies on trans-national collaborations, has been the influence of national culture on the beliefs and behaviours of executives who manage such alliances (Trompenaars, 1993; Adler, 1990; Hofstede, 2001, 1997). Consequently, despite the proliferation of research on the influence of national culture on trans-national business alliances, past studies pre-eminently explore the effects of inter-cultural differences at the individual-level (personal culture) and how personal culture influences cross-cultural negotiations and management. This article takes the discourse to a new paradigm through exploring the influence and effects of the following three forces in shaping organisational beliefs and behaviours (organisations culture) to trans-national alliance relationships: intra-country nationality/ ethnicity (sub-nationality) differences, operating environment of the organisation – the country’s unique historic, social, political and economic environment and organisational characteristics – differences in the size, mode of incorporation, industry sector and business activity of individual enterprises. It is important to understand how these three forces shape organisational culture and how the resulting organisational culture can influence relationships with partners. Cultural mismatch (lack of alignment in the beliefs and behaviours) of alliance partners is more damaging to joint enterprises than financial, product or market mismatch as cultural mismatch can intensify financial, product or market risks (Sirmon and Lane, 2004; Schein, 1992). Notwithstanding, the importance of organisational culture (as captured by the three forces – intra-country national culture, operating environment and organisational characteristics) in influencing trans-national business relationships, the conclusions in several recent studies (Griffith et al., 2006; Sirmon and Lane, 2004; Leonidou et al., 2002) reveal that these issues have not been explored in past studies. Consequently, the research discussed in this article makes a significant contribution to our knowledge by investigating whether and, if so, how national culture influences organisational culture and trans-national business-tobusiness relationships. The empirical research in this study draws on and synthesises knowledge from three research themes (national culture, organisational culture and interorganisational relationships) which past studies have pre-eminently treated as independent areas of inquiry. Literature review National culture and organisational culture National culture is work-related values and behaviours of individuals within a country (Bird et al., 1999; Tayeb, 1997). Many studies (Harris and Moran, 2000; Hofstede, 2001, 1997) use the term culture and nationality interchangeably thus implicitly suggesting that each country (political entity) has populations with shared history and experiences and therefore, each country has a homogeneous culture. Past studies do not address in any great detail intra-country differences arising from heterogeneity in religion and ethnicity. In countries such as Malaysia, the context of this study, there is substantial heterogeneity in religion and ethnicity and consequently, it will be inaccurate to contend that Malaysia has a national culture per se. Malaysia’s population comprises of 61.4 per cent Bumiputra (primarily Malay but also other indigenous groups, predominantly Muslim), 23.7 per cent Chinese (predominantly Buddhist) and 7.1 per cent Indian (predominantly Hindu). Although there are large numbers of Chinese in other countries within the Association of South East Asia Nations (ASEAN), the non-indigenous population in other ASEAN countries is <8 per cent of the total population. Consequently, in terms of nationality and religion, Influence of national culture 45 CCM 16,1 46 unlike Malaysia, these countries have an over-arching cultural homogeneity and as a result Malaysia provides a unique study setting. When the term culture is associated with the term organisation, additional conceptual and semantic complexities are evident (Wilms et al., 1994). Organisations are open systems in constant interaction with its environment. The term organisational culture not only capture the unconscious, but deliberate elementary assumptions and convictions shared by group members (sub groups, occupational units, hierarchical layers and geographically dispersed segments) but also the beliefs of group members about the organisation and its broader environment (Schein, 1992). These assumptions, convictions and beliefs of group members are their learned responses to coping with the external environment and managing the internal integration of the organisation (Schein, 1992). National culture of Malaysian organisations In the Malaysian context, the term organisational culture present even greater complexities because of Malaysia’s unique historical, social, economic and political background and the influence of these on the shared unconscious but deliberate elementary beliefs, convictions and behaviours of organisational members. The social, political and economic policies of the British Colonial government and independent Malaya’s Malay dominated government witnessed the growth of organisations with distinct identities of national culture. The Colonial government assisted many British enterprises to start-up and develop their operations in Malaya through offering land concessions, tax incentives and other support. By the late 1940s, British enterprises such as Harrisons and Crosfield, Sime Darby and Guthrie dominated cash crop production and international trade. Small-tomedium scale Chinese and Indian enterprises dominated retail and wholesale trades. Chinese enterprises became even more dominant in post-colonial Malaya. Influenced by the experiences of their friends, relatives and business colleagues in recently independent Burma (Myanmar), in the period leading up to Malaya’s independence, many wealthy Indians left Malaya. When Myanmar became independent, the businesses and properties of non-indigenous communities were nationalised. This action affected the Indians most severely because Indians were the dominant non-indigenous business community in Burma. Because China was under a Communist regime, the Chinese in Malaya could not return to their homeland to start-up private enterprises. Consequently, Chinese entrepreneurs in Malaya did not endeavour to relocate to China. Unlike independent Burma’s government, Malaya adopted a laissez-faire economic policy that encouraged foreign investment and international trade. Taking advantage of Malaya’s investment friendly environment, small-to-medium scale Chinese enterprises strategically accessed the benefits of joint-enterprise with foreign companies through becoming local distributors and agents for these companies. Rapid economic development in Malaya witnessed the emergence of a sizeable urban middle class predominantly made-up of the Chinese. Growing disposable incomes amongst an upwardly mobile Chinese middle class created ‘‘new’’ business opportunities especially in areas such as housing, retailing and finance. Enterprising Chinese wholesalers and retailers diversified into housing development, plantations, finance and other activities to service the needs of the growing middle class population (Tan, 1982). These developments witnessed the emergence of a few large and diversified Chinese owned business conglomerates. The growing economic position of the Chinese in Malaya marginalised the Bumiputras while concurrently the political domination of Bumiputras marginalised the Chinese (Tan, 1982). Perceptions of economic and political marginalisation amongst the different nationalities perpetuated inter-nationality distrust and tensions which culminated in nation-wide race riots in 1969. In 1971, in what it claimed to be an action to address distrust and tensions between different nationalities, the government promulgated a social engineering program described as the new economic policy (NEP). The NEP proposed to address Bumiputra grievances of economic marginalisation through policies, programs and actions targeted to increase Bumiputra participation in business and the professions. The NEP substantially improved the economic position of the Bumiputras. For example, Bumiputra equity in private business increased from <1 per cent in 1970 to >20 per cent in 1990 (Crouch, 1993). However, evidence of increased Bumiputra participation in business was primarily the result of Federal and State governments establishing large numbers of ‘‘trust’’ agencies (registered as Bumiputra organisations) and conducting business as State monopolies or as preferred suppliers to the government. State and Federal governments rapidly established wholly-owned business enterprises and also entered into joint-ventures with foreign companies so much so that by 1990 government equity represented >50 per cent of private share capital designated as Bumiputra (Crouch, 1993). State and Federal governments declared that government equity in these ‘‘trust’’ agencies will be divested through a phased privatisation program reserved for the Bumiputras. In the mid 1980s, the privatisation program was introduced through a spate of management ‘‘buy-outs’’ by Bumiputras that was aided through low-interest loans from the government, official sponsorship, preferential government contracts and other support (Jesudason, 1989; Jayasankaran, 1998a, b, c). Review of Malaysia’s colonial, social, economic and political background suggests that the organisations in the country can be delineated into different national cultural typologies. Ten organisational typologies, based on differences in the nationality/ ethnicity of the owners and senior management team (Bumiputra, Chinese, Indian, Others), business registration (in Malaysia, businesses are registered as Bumiputra or non-Bumiputra), how the business was incorporated (sole enterprise, private company limited by shares, public company, joint-venture company, multinational company etc) and business characteristics (industry sector, number of employees, sales, business activity etc) were delineated. The ten organisational typologies are Government-Owned Corporation, Chinese Family Enterprise, Chinese Company (Private Limited), Bumiputra Company (Private Limited), Privatised Government Company, Bumiputra/Government (Public Listed), Chinese Family Controlled (Public Listed), Chinese-Bumiputra Joint Venture, Multinational Corporations and Indian-Bumiputra Joint Venture. Inter-organisational relationships Co-operative aspects of economic behaviour are relatively neglected in academic discourses. Whilst economists rationalise the theory of pure and perfect competition, there is no corresponding discourse on pure and perfect co-operation (Alderson, 1965). Concepts such as trust, commitment, co-operation and communication have featured significantly in social exchange theory (Scanzoni, 1979; Cook and Emerson, 1978; Blau, 1968), buyer behaviour (Reichers, 1985; Becker, 1960), marital relationships (Thompson and Spanier, 1983) and organisational behaviour (Meyer and Allen, 1991). However, these concepts were only adopted in inter-organisational relationship discourses much later. Even when relational concepts were captured in inter-organisational relationship discourses, until the 1990s, the focus was pre-eminently on issues pertaining to power, conflict and the management of conflict (Frazier and Summers, 1986; Lusch and Influence of national culture 47 CCM 16,1 48 Brown, 1982; El-Ansary and Stern, 1972). A noticeable shift in research orientation only became evident from about the early 1990s. From the 1990s, a number of studies (Vlosky and Wilson, 1997; Anderson and Narus, 1991; Oliver, 1990) investigated interorganisational relationships much more broadly and explored issues pertaining to inter-partner trust, commitment, co-operation, communication and bonding. These studies concluded that trust, commitment, co-operation, communication and bonding rather than domination, power and control underpinned successful joint-enterprises. One of the most salient features of enduring social relationships is the underlying trust shared by members of the social unit (Rotter, 1980). Similar to a social context, inter-organisational trust is fostered and sustained when partners inspire confidence regarding their reliability and integrity (Morgan and Hunt, 1994; Schurr and Ozanne, 1985). Trust supports beliefs that the actions of partners will lead to beneficial outcomes and that partners will not take unexpected actions that will result in detrimental outcomes (Anderson and Narus, 1991). Frequently, organisations make commitments and pursue risk taking behaviours based on confidence about their partners. Relationships founded on trust are more enduring. Trusting relationships will endure difficulties such as not being able to achieve agreed outcomes, provided partners believe that unforseen circumstances inhibited the outcomes (Anderson and Narus, 1991). Relationship trust increases when partner behaviours are perceived as consistent, competent, honest, fair, responsible, helpful and benevolent. Relationship trust diminishes when, because of implicit or explicit misrepresentations, partner behaviours are perceived as opportunistic (Morgan and Hunt, 1994; John, 1984). Trust engenders honest communication of ideas and beliefs regarding group goals and problems including information about satisfaction or dissatisfaction with partners and jointly searching for answers to these issues (Zand, 1972). Relationships built on trust can withstand greater stress and adapt more strongly to challenges. Honest communication of ideas and collaborative goal setting increase goal compatibility and encourage social bonding (person-to-person relationships) between key individuals in partnering organisations. However, measuring relationship trust at any one point in time may be misleading. Beliefs regarding relationship trust are the outcome of immediate past experiences and relationship trust can change if future experiences are either more positive or more negative than past experiences (Wilson, 1995; Anderson and Narus, 1991; Dwyer et al., 1987). Trust increases relationship commitment (Morgan and Hunt, 1994; Berry and Parasuraman, 1991). Past studies have defined relationship trust as (a) the desire for relationship continuity (Anderson and Weitz, 1992; Dwyer et al., 1987), (b) relationship solidarity (Boyle et al., 1992), (c) willingness to make short-term sacrifices to achieve longer term objectives (Comer and Zirger, 1997; Dwyer et al., 1987), (d) motivation and involvement (Mowday et al., 1982), (e) positive affect and loyalty (Kanter, 1972), (f) willingness to make investments in the relationship (Anderson and Weitz, 1992), (g) loyalty (Angle and Perry, 1981) and (h) willingness to provide special help in times of need (Kim and Frazier, 1997). These definitions reveal overarching common themes such as positive action underpins commitment (Dwyer et al., 1987), relationship commitment is measurable (Salancik and Meindl, 1984) and that relationship commitment is based on long lasting and sustainable relationships (Gundlach et al., 1995). Successful partnerships are dependent upon commitment between partners (Barney, 1990; Schurr and Ozanne, 1985). Commitment can be the result of underlying trust between partners and concurrently commitment can also foster and promote trust i.e. commitment can be both the cause and effect of trust. Similarly, where co-operation does not ensue from partner dependence, for example, because of contractual obligations or the market power of a partner, it can be an antecedent and also a precedent to trust and commitment. Trust and commitment can engender co-operation and at the same time, perceived co-operative behaviours can engender trust and commitment. Organisations which share trusting relationships often willingly co-operate and postpone outcomes from joint enterprises if their partners face temporary difficulties in meeting their obligations (Anderson and Narus, 1991). Co-operation is reinforced and trust and commitment between partners increase when conflicts are resolved to their satisfaction and are not resolved as a compromise as a result of the power, control and dependence relationships (Gibb, 1961). Relationship commitment can be discerned and even measured from allocations of economic, communication and emotional resources, durability of the relationship and consistency in actions (Anderson and Narus, 1991). Commitments increase when partners believe that the relationship is important and take actions that advance the relationship (Morgan and Hunt, 1994; Moorman et al., 1993). Commitment to a jointenterprise becomes stronger when partners believe that other actors in the jointenterprise reveal even greater commitment to the initiative (Ross et al., 1997). Commitment can be distinguished into affective and continuance commitment. Affective commitment derives from the desire to continue the relationship because of the benefits from the partnership, whereas continuance commitment represents situations where partners have to persist with the relationship because of difficulties in terminating the partnership because of contractual obligations or the unequal power of partners (Allen and Meyer, 1990; Cook and Emerson, 1978). The quality and effectiveness of communication often fosters trust, commitment and co-operation as it facilitates better understanding of the needs and motivations of partners. In effect, the quality and effectiveness of communication foster a more conducive climate for resolving disputes (Moorman et al., 1993). Quality and effectiveness of communication enable partners to align their expectations to the missions and objectives of the joint enterprise rather than to the expectations of their individual organisations (Etgar, 1979). Non-evaluative, spontaneous, emphatic and suggestive communication (rather than planned, neutral and directive exchanges) foster greater trust, co-operation and commitment between partners (Gibb, 1961). Often the effectiveness and quality of communication is a precursor to fostering greater trust, cooperation and commitment (Morgan and Hunt, 1994; Moorman et al., 1993). However, accumulation of experience and knowledge regarding partners and underlying issues that govern the relationship can foster trust, co-operation and commitment and improve the quality and effectiveness of communication. Consequently, trust, co-operation and commitment can be a precursor and an antecedent to good quality and effective communication between partners (Anderson and Narus, 1990). Trust, commitment, co-operation and communication are mediating influences in relationship exchanges and can determine relationship termination costs, benefits from the joint enterprise, shared values of the joint enterprise and partner behaviours (Morgan and Hunt, 1994). Through directing investments into longer term outcomes and partaking in greater risk taking behaviours based on beliefs that partners will not act opportunistically, organisations can build trust, commitment, co-operation and communication. Greater trust, commitment, co-operation and communication influence relationship outcomes including acquiescence, propensity to exit, functional conflict, decision-making uncertainty and sustainability of the joint enterprise (Morgan and Influence of national culture 49 CCM 16,1 50 Hunt, 1994). Relationship trust and commitment increase when relationships are based on sharing resources, opportunities and benefits that are superior; maintaining high standards of shared values and pursuing alliances with partners with shared values; sharing valuable information including expectations, market intelligence and evaluations of performance; and not taking unfair advantage of partners (Morgan and Hunt, 1994). Through building trust, commitment, co-operation and communication and fostering shared goals and visions, partners can increase compatibility and develop person-to-person interactions between key individuals in the partnering organisations (social bonding). Summary statements and hypotheses Discourses on national culture and organisational culture in extant studies suggest that, in effect, the difference between the two concepts is primarily the unit of analysis or the study context. In the case of national culture, the unit of analysis is the nation (political entity) and in the case of organisational culture, the unit of analysis is the work group or organisation. National and organisational culture represent the values and behavioural norms, the beliefs, language, rituals governing behaviour, patterns of action, shared expectations and responses to the environment of the group that constitute the nation or the organisation. Analysis of the concepts, theoretical foundations, epistemologies and methodologies in extant studies on national and organisational culture suggest that relational issues are explicitly or implicitly discussed identically. For example, Hofsted (2001) invokes risk-taking orientation as capturing national culture, whereas Chatman (1991) invokes risk-taking orientation as capturing organisational culture. Based on our analyses above, we postulate that the beliefs and behaviours of organisations (as measured by relational constructs such as trust, commitment, co-operation, communication, dependence, social bonding and compatibility) to their trans-national partners are determined by the culture of the organisation. Further, we postulate that organisational culture is influenced by the nationality of the owners and senior managers of individual organisations, a variety of nation specific historical, social, political and economic factors; and the characteristics of individual organisations such as its size, business activity, industry sector and basis of incorporation. (Table I). Based on the above analyses, we offer following hypotheses: H1. Organisations from identical national cultures are significantly similar in their beliefs about and behaviours to their trans-national partners. H2. Organisations of different national cultures significantly vary in their beliefs about and behaviours to trans-national partners. Methodology Survey research The sampling frame for the survey was constructed from information in trade directories and food industry databases. Information based on review of extant studies on national culture, organisational culture and business-to-business relationship was used to develop a structured close-ended questionnaire. The questionnaire comprised statements (measurement items) describing beliefs and behaviours regarding overall business operations, business strategy and the conduct of transactions and relationships with the organisation’s most important trans-national partner. Respondents were asked to indicate on a five-point Likert scale, anchored from Constructs and measures Trust Partner inconsistent and unreliable Partner inconsiderate Partner undependable Partner alters facts Uncertain of partner’s plans Easy to do business with partner Commitment Committed to partner Maintain relationship indefinitely Loyal to partner Maximum effort to maintain relationship Partners problems of no concern Co-operation Conscientious in co-operative relationships Flexible contract terms Rework agreements Put aside contractual terms Dependence Substantial investments in infrastructure and facility Partner’s authority Communication Partner believes written rules, policies and procedures important Task, activities, and schedules documented Relationship based on shared informal understanding Compatability Compatibility in organisational values and corporate ethos important Differences in organisational values and corporate ethos inevitable Compatibility in organisational values and corporate ethos not important Compatibility in management styles important Compatibility in management styles not important Social bonding Personal and social relations influence co-operation Regularly review performance of joint-business Influence of national culture Factor loading Item-to-total correlation Alpha if item deleted 0.789 0.838 0.800 0.579 0.743 0.598 0.7060 0.7537 0.7656 0.5415 0.6856 0.5455 0.8354 0.8275 0.8240 0.8677 0.8390 0.8621 0.760 0.661 0.692 0.660 0.429 0.6369 0.5664 0.6171 0.5216 0.3770 0.6951 0.7109 0.6942 0.7264 0.7811 0.371 0.888 0.548 0.819 0.3154 0.7229 0.4967 0.6460 0.7607 0.5124 0.7045 0.5727 9.053E-02 0.4002 0.4743 0.143 0.3377 0.5291 0.971 0.8182 0.7041 0.801 0.703 0.7140 0.6601 0.8182 0.8754 0.614 0.6328 0.6974 0.345 0.4833 0.7755 0.867 0.709 0.498 0.7263 0.7628 0.6413 Table I. 0.7164 0.5069 Factor loadings and reliability of measure of partner relationships 51 2.249E-03 0.336 0.837 0.2833 0.4273 ‘‘Strongly Agree’’ to ‘‘Strongly Disagree’’, the extent to which each statement appropriately captured the beliefs and behaviours of their organisation. Respondents were also asked to identify a cultural typology which best described their organisation. For this, the ten cultural typologies identified in the generative study and an additional item captioned ‘‘Other’’ was included and respondents were asked to indicate the label that best described their organisation. The questionnaire also delineated several organisational characteristics. Scaled tabulations for sales, number of employee, years in business, value chain position (retailer, wholesaler, distributor, manufacturer etc), industry sector (dairy, meat, rice, wheat etc), mode of registration (sole enterprise, private company, public company, CCM 16,1 52 joint-venture etc) and business arrangement with principal overseas partner (agent, franchisee, licensee, joint-venture manufacturing, contract manufacturer etc) were provided. Respondents were asked to select one item in each variable that best described their organisation. The questionnaire was pre-tested through in-depth discussions with the Chief Executives Officer (CEO) of five organisations in Malaysia at which time the questionnaire was administered. As a result of the pre-test and discussions, some minor changes to wordings and descriptions of measurement items and organisational characteristics were made. The questionnaire was then finalised. The finalised questionnaire and a personalised covering letter were sent to the CEO’s of 1,248 organisations identified through systematic sampling. Every third listing in the survey sampling frame was selected for questionnaire administration. The five organisations at which the pre-tests were conducted were eliminated from the survey. Four weeks after the questionnaires were initially sent, personalised universal reminders were sent to the CEO’s of all 1,248 organisations thanking those who had responded and requesting others to return completed questionnaires within the next four weeks. 421 responses were received within eight weeks of first sending out the questionnaires. Elimination of 45 partially completed questionnaires yielded 376 useable responses, a response rate of 30.13 per cent. Data analysis Exploratory factor analysis with maximum likelihood extraction was invoked to reduce and summarise all measurement items in the questionnaire. Factor loading below 0.32 and items that significantly loaded on more than one factor were excluded from further analysis. Items with factor loadings of >0.32 were subjected to reliability analysis using the internal consistency method. Analysis for internal consistency was completed independently for items within each factor. Items with reliability coefficients (Cronbach ) of <0.50 were omitted. The measurement items used in the study are summarised in Table I. To examine the effects when all variables are used in combination, discriminant function analysis was invoked to identify the relative magnitude of different variables across each organisational typology. Discriminant function analysis simultaneously tests different variables and identifies interrelationships and overlaps between variables (Hair et al., 1987). Theoretically, the signs and magnitudes of discriminant coefficients are analogous to weights in regression analysis. However, this interpretation is questionable because the data is often unstable (Hair et al., 1987). Because of this limitation, pooled within group correlation matrixes were examined for multi-collinearity in data. If multi-collinearity was not evident, standardised canonical discriminant function coefficients were analysed to identify the most significant intergroup predictors of variation. Thereafter, significance of the functions (Wilks’) and the importance of each function in explaining group differences (Eigen values) were reviewed. Each function identifies complex and significantly different positive and inverse correlations across relational measures such as trust, commitment, cooperation, communication, social bonding, dependence and compatibility. Finally, the functions at group centroids were analysed. Analyses and discussions Assessment of pooled within group correlation matrix revealed low correlations between the predictors (Table II). Only one significant correlation was evident, the positive correlation between social bonding and compatibility (0.607). Lower level of negative correlation was also evident between formal communication and co-operation (0.471). The findings conformed to what we predicted. We expected beliefs and behaviours regarding person-to-person relationships amongst individuals in the alliance to be positively correlated to compatibility with values, ethos and missions of partner organisations. We also expected trust and formality to be inversely correlated, lower levels of trust resulting in greater use of contractual and other process driven modes of exchanges. Additionally, the results revealed correlations, albeit at low levels, between several other predictors. For example, there was positive correlation between trust and co-operation (0.400), co-operation and compatibility (370), formal process of communication and dependence (0.364) and inverse correlation between formal process of communication and trust (0.383). The significance attached to the univariate F ratios reveal that when the predictors are assessed individually, the first five functions are significant in differentiating between the organisational types (Wilks’ ¼ 0.165, 2 (63) ¼ 661, p < 0.001; Wilks’ ¼ 0.315, 2 (48) ¼ 423, p < 0.001; Wilks’ ¼ 0.450, 2 (35) ¼ 293, p < 0.001; Wilks’ ¼ 0.609, 2 (24) ¼ 182, p < 0.001; Wilks’ ¼ 0.781, 2 (15) ¼ 91, p < 0.001; Wilks’ ¼ 0.973, 2 (8) ¼ 10, p ¼ 0.260; Wilks’ ¼ 0.997, 2 (3) ¼ 0.958, p ¼ 0.811). The structure matrix reveal that function 1 is positively correlated to trust, compatibility and co-operation and inversely correlated to social bonding; function 2 is positively correlated to dependence and co-operation and inversely correlated to compatibility and formal communication; function 3 is inversely correlated to compatibility and social bonding and positively correlated to co-operation and formal communication; function 4 is positively correlated to formal communication, dependence and social bonding and inversely correlated to co-operation; and function 5 is positively correlated to social bonding, co-operation and trust and inversely correlated to dependence (Table III). The eigenvalues for the functions reveal that the first five functions account for nearly 99 per cent of data variability thus signalling that the data is stable in explaining group differences. Correlating the organisational typologies with functions at group centroids disclose differences in the beliefs about and behaviours to trans-national partners across five ‘‘functions’’ (Table IV). Significantly, different levels of complex positive and inverse beliefs about and behaviours to partners are evident across the organisational typologies delineated in this study. Different levels and combinations of trust, commitment, co-operation, communication, social bonding, dependence and compatibility can be discerned across the organisational typologies (Table V). It is evident that organisations within each Measure Influence of national culture 53 Correlation CoSocial Trust Commitment operation Communication Dependence bonding Compatibility Commitment 0.328 Dependence 0.314 Co-operation 0.400 Trust 1.000 Social bonding 0.327 Communication 0.383 Compatibility 0.145 1.000 0.030 0.370 0.328 0.338 0.246 0.202 0.370 0.243 1.000 0.4000 0.227 0.471 0.108 0.246 0.364 0.471 0.383 0.281 1.000 0.189 0.030 1.000 0.243 0.314 0.274 0.364 0.268 0.338 0.274 0.227 0.327 1.000 0.281 0.607 0.202 0.268 0.108 0.145 0.607 0.189 1.000 Table II. Correlations of partner relationship constructs CCM 16,1 54 organisational typology reveal homogeneity across these relational constructs. However, it is also evident that, based on these relational paradigms, each organisational typology is significantly different to other organisational typologies in the study. Chinese-Family Business, Chinese-Bumiputra Joint Venture, Bumiputra/ Government (Public Listed) and Chinese Company (Ltd) demonstrate significantly greater orientation to social bonding with their partners. Other than Bumiputra/ Government (Public Listed), organisations within this group evolved from Chinese Family Enterprises. In a family enterprise, the owners tend to take-on leadership roles and business is frequently pursued and sustained through personal and trusting relationships between the owners and senior members of partner organisations. Consequently, it is not surprising that smaller scale Chinese organisations such as Chinese (Family Business) and Chinese Company (Ltd) reveal greater relationship orientation and priority to compatibility and social bonding. Even when small-scale Chinese organisations become large organisations, the owners retain their dominant role in partner relationships and continue to administer partner relationships through close personal ties (personal bonding). The owners do not encourage personal bonding between the organisation’s managers and members of the overseas partner. The two different modes of engagement with partners, personal bonding by owners and process driven approach by the managers, may explain why Chinese Family Controlled (Public) organisations reveal less orientation to exchanges based on relationships. The survey questionnaire was completed by the managers and therefore, the position reported is the beliefs and behaviours of the managers. Based on the responses in the survey questionnaire, the relationship characteristics of Chinese Constructs Table III. Correlation between relationship constructs and discriminant functions Dependence Compatibility Communication Social Bonding Co-operation Commitment Trust 1 2 Function 3 4 5 0.191 0.254 0.144 0.271 0.242 0.101 0.322 0.617 0.348 0.323 0.006 0.233 0.116 0.184 0.165 0.789 0.362 0.444 0.360 0.220 0.112 0.499 0.209 0.609 0.384 0.369 0.278 0.026 0.453 0.256 0.255 0.723 0.723 0.191 0.449 Organisational type Government-Owned Corporation Bumiputra Company (Ltd) Chinese (Family Business) Government Company (Privatised) Chinese Family Control (Public) Chinese Company (Ltd) Table IV. Organisational types and Chinese–Bumiputra Joint Venture Multinational partner relationship – Indian-Bumiputra Joint Venture functions at group Bumiputra/Government (Public Listed) centroids 1 2 0.403 1.148 1.431 0.167 1.553 0.974 0.152 0.778 1.063 0.669 0.587 0.379 1.233 0.570 0.460 0.152 1.102 0.562 1.607 0.541 Function 3 0.493 0.131 0.678 1.346 6.533E-03 0.570 0.677 1.117E-03 0.365 0.467 4 5 7.868E-02 0.551 0.263 4.598E-02 0.707 0.325 0.946 0.301 1.434 0.337 0.238 0.219 0.836 0.245 0.479 1.259 0.555 0.193 0.379 0.100 Construct Important Not important þ Trust þ Compatibility þ Co-operation Bumiputra Company (Ltd) Chinese (Family Business) Bumiputra/Government (Public Listed) Indian-Bumiputra Joint Venture Chinese (Family Business) Chinese-Bumiputra Joint Venture Government Company (Privatised) Bumiputra/Government (Public Listed) Government Owned Corporation Government Company (Privatised) Chinese Family Control (Public) Chinese Company (Ltd) Multinational Social bonding þ Dependence Compatibility Communication þ Co-operation Compatibility Social bonding þ Co-operation þ Communication þ Communication þ Dependence þ Social bonding Co-operation þ Social bonding þ Co-operation þ Trust Dependence Chinese Family Control (Public) Bumiputra Company (Ltd) Chinese Company (Ltd) Chinese-Bumiputra Joint Venture Chinese Family Control (Public) Indian-Bumiputra Joint Venture Multinational Influence of national culture 55 Chinese-Bumiputra Joint Venture Chinese Family Business Chinese Company (Ltd) Government Owned Corporation Bumiputra/Government (Public Listed) Indian-Bumiputra Joint Venture Chinese-Bumiputra Joint Venture Multinational Bumiputra Company (Ltd) Chinese (Family Business) Chinese Company (Ltd) Family Controlled (Public) organisations are significantly different to Chinese Family Enterprises and mirror the characteristics of multinational organisations. Not withstanding, the caveat regarding the two pronged partner engagement in Chinese Family Controlled (Public) organisations, overall, it is evident that the size and mode of business incorporation influence organisational culture more significantly than the national culture of the organisation. When family businesses become larger and become public listed companies, these organisations begin to adopt more systematic and formal process of partner engagement and reduce their reliance on personal bonding. Bumiputra Company (Ltd), Bumiputra-Indian Joint Venture, Bumiputra/ Government (Public Listed) and Government-Owned Corporation reveal belief and behaviour characteristics that give importance to trust, compatibility and co-operation and significantly less importance to social bonding. The partners of many of these organisations are also shareholders, organisations that the government has acquired or in the case of Indian-Bumiputra Joint Venture, new business start-ups between large companies in India and government/Bumiputra organisations in Malaysia. These organisations (Bumiputra Company (Ltd), Bumiputra-Indian Joint Venture, Bumiputra/ Government (Public Listed) and Government-Owned Corporation) tend to research and complete due diligence before pursuing substantive investments in joint enterprises with partners. Often, compatibility in visions and values influence decisions to pursue such alliances. Therefore, it is plausible that in the case of these organisations, joint Table V. Summary information – organisational types and relationship orientations CCM 16,1 56 enterprises with partners are founded on trust, commitment and co-operation resulting from systematic information gathering about partners and not, as with alliances by smaller but long established family enterprises, based on relationships at the person-toperson level. Consequently, factors such as the type of partnering arrangement, business activity and the size of business can influence partner relationships much more significantly than organisation’s national culture. Chinese Family Controlled (Public), Chinese Company (Ltd) and Multinational organisations also reveal lower orientation to relational bonding. These organisational typologies indicated low orientation to trust, co-operation and compatibility. The relationship between these organisational typologies and their partners are driven to achieving targeted commercial goals. Therefore, larger organisations, particularly public listed companies, seem to adopt formal relationship processes at the organisational level but encourage personal bonding at the individual level. It seems that the size and mode of incorporation of these organisations influence partner relationships more significantly than the national culture of the organisation. Chinese (Family Business) and Chinese-Bumiputra Joint-Venture reveal significant orientation to partner dependence and the use of formal modes of communication but low orientation to compatibility. This may arise from the unequal power balance between these organisations and their trans-national partners. The small-scale organisations in the study are mostly agents or local representatives of large international organisations. More than 57 per cent (n ¼ 14) of Chinese Family Business in this study are importers with 43 per cent reporting sales of less than M$50 million per year. Also, Chinese-Bumiputra Joint Venture organisations are significantly oriented to partner dependence and co-operation but not oriented to compatibility and formal communication process. Chinese-Bumiputra Joint Venture organisations in the study are primarily importers, franchisees or licensees. Consequently, the nature of business and size of business rather than the organisation’s national culture is the major influencer of partner relationships. In the case of franchise and licensing arrangements, we anticipated dependence on and co-operation with partner to feature highly. Therefore, in Chinese-Bumiputra Joint Venture organisations, we did not expect to observe low orientation to formal process. Franchising and licensing arrangements are almost always based on contractual arrangements that govern relationships. The low orientation to compatibility in these organisations seems logical because most licensors and franchisors are large organisations which use franchising and licensing arrangements to form alliances with small-scale organisations to enter new overseas markets. Consequently, relationship dependence and low orientation to compatibility and formal process is influenced by the mode of business relationship (e.g. franchising, licensing etc) and the position and power of partners. Consequently, in these instances, factors such as the mode of collaboration, size of business, dependence and power equations, rather than the organisation’s national culture, influence relationships with partners. Conclusions Organisations delineated into the ten national cultural typologies reveal significant shared characteristics (homogeneity) in their beliefs about and behaviours to their trans-national alliance partners. This supports the hypothesis that these organisations can be classed into ten distinct groups. Each group reveal significant differences to other groups (heterogeneity) in regard to their beliefs about and behaviours to their trans-national alliance partners. This supports the hypothesis that the ten organisational typologies are significantly different orientations in regard to beliefs about and behaviours to partners. Consequently, we conclude that organisational typologies can be delineated based on the national culture of the owners and senior managers (Bumiputra, Chinese, Indian etc), the operating environment of the organisation (historical, political, social and economic background of the country) and the organisational characteristics (size of organisation, business activity, industry sector, basis of incorporation etc). The findings reveal that the national culture of the organisation (as captured by the nationality of the owners and senior managers) is not the only influencer of organisational beliefs about and behaviours to partners. This is evident from the fact that organisations from similar national culture but of different size, basis of incorporation, business activity and mode of relationship with partners demonstrate significantly different beliefs about and behaviours to partners. For example, Chinese Family Business and Chinese Company (Ltd) are significantly oriented to compatibility and social bonding, whereas Chinese Family Controlled (Public) organisations mirror practices in multi-national corporations in that they use arms length and formal modes of engagement with partners. Consequently, the size of the organisation and mode of incorporation (for example, public listed companies have greater accountability and reporting requirements than family enterprises) influence engagements with partners much more significantly than the organisation’s national culture. We conclude that discourses on organisational culture underpinned by assumptions that each country has a homogeneous national culture and therefore, nationality influenced organisational culture have to be re-examined. Several other factors influence organisational culture much more significantly than national culture. National culture significantly influences organisational culture when the organisation is small and the owners and senior managers (who are usually family members) are actively engaged in the day-to-day administration of operations. This is evident from the beliefs about and behaviours to partners of Chinese Family Business. In a family enterprise, owners tend to lead the organisation and business is often developed and maintained through close personal contact networks, personal bonding, trust, commitment and co-operation between the organisation’s owner and senior members of the partner organisation. However, as the organisation becomes large and its business structure (sic mode of incorporation) changes, in most instances more formal systems and procedures are introduced. This study examined direct correlations between organisational culture and relational constructs. The findings reveal complex interrelationships between different relational constructs. For example, varying degrees of positive and inverse correlations are evident between social bonding and compatibility, formal process of communication and cooperation, trust and co-operation, co-operation and compatibility, formal process of communication and dependence and formal process of communication and trust. It is logical to conclude that these interrelations between relational constructs will influence beliefs about and behaviours to alliance partners. Additionally, some relational constructs can be the cause, the result or be both the cause and the result of other relational paradigms. For example, in some instances, trust can be an antecedent to commitment, whereas in other instances, commitment can foster trust. Similarly, good quality and effective communication can foster trust, commitment and co-operation but trust, commitment and co-operation can also facilitate better quality and more effective communication. Further, factors such as the quality and effectiveness of communication and the resulting compatibility in visions and values can influence relationships with Influence of national culture 57 CCM 16,1 58 partners. Finally, even if there are no differences in the extent to which two organisations trust their partners, their commitment to their partner can be different because of differences in their dependence on the partner because of contractual obligations or power and dependence equations between the partners. If one partner has greater power because of size or reputation, dependence relationships can result and this can impact on commitment to the relationship. Relationship between organisations and partners is a highly complex phenomenon. Inter-organisational relationships are the outcome of complex interactions between relational paradigms (which we captured in the study through the label functions), national culture of the organisation (which we captured through the nationality of the owners and senior managers), organisational characteristics (size, industry sector, activity etc) and the operating environment (the country’s political, social and economic environment). Even though this study makes a substantive contribution to knowledge on national culture, organisational culture and business relationships, it has some limitations and these issues need to be explored in future research. The causes and effects of interrelationships of relational constructs across different organisational typologies need to be investigated. The interrelationships of relational constructs influence beliefs about and behaviours to trans-national partners and therefore, such research will be of great value in theory building and management practice. Notwithstanding the limitations identified, the findings and conclusions in this study make significant contribution to our stock of knowledge about national culture, organisational culture and business relationships by revealing that organisational culture and alliance relationship is a complex phenomenon and cannot be determined by the national culture of organisations. 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