Organizational behaviour across cultures Running head: organisational behaviour across cultures

Organisational behaviour across cultures: Theoretical and methodological issues for developing multi-level frameworks involving culture

Ronald Fischer Victoria University Wellington & Centre for Applied Cross-Cultural Research Maria Cristina Ferreira, Eveline Maria Leal Assmar (Universidade Gama Filho, Rio de Janeiro), Paul Redford (King Alfreds College Winchester), Charles Harb (American University Beirut),

Revised version, September 22, 2004

Parts of the present paper have been presented at the Regional conference of the International Association for Cross-Cultural Psychology, Budapest, Hungary and the Third Biennial International Conference on Intercultural Research, Taipei, Taiwan.

Corresponding author: Ronald Fischer School of Psychology, Victoria University of Wellington, PO Box 600, Wellington, New Zealand phone +64 4 4635233 ext. 8920 fax +64 4 4635402 Ronald.Fischer@vuw.ac.nz

Organizational behaviour across cultures Abstract

The present paper has two objectives. First, general issues for developing and testing cross-cultural multi-level models such as variable identification, measurement, sampling and data analysis are discussed. A second aim is to illustrate some of these issues by developing a multi-level framework incorporating variables at an individual, organizational and national level. The goal is to explain cross-cultural differences in extra-role behaviour. Based on a review of previous multi-level research and cross-cultural research it is proposed that the effect of national culture on work attitudes and behaviour is mediated by organizational practices. The framework is formulated using recent recommendations for the development of multi-level models.

Organizational behaviour across cultures ORGANIZATIONAL BEHAVIOUR ACROSS CULTURES: THEORETICAL AND METHODOLOGICAL ISSUES FOR DEVELOPING MULTI-LEVEL FRAMEWORKS INVOLVING CULTURE The understanding of organizational behaviour in different cultural contexts has been a formidable challenge for academics and practitioners. Due to the complexity of organizational life, variables associated with the individuals, the overall organization and the societal context need to be integrated in theory and research (Aycan, 2000a). For example, cross-cultural research has

demonstrated the influence of national culture on both organizational practices and individual work behaviours and perceptions (for a review see Smith, Fischer, & Sale, 2001). Organizational culture and organizational practices have been found to influence work behaviours and attitudes at an individual level (see Ashkanasy, Wilderom, & Peterson, 2000). However, there is little integration of both organizational and socio-cultural variables. Various reviews (Aguinis & Henle, 1994; Aycan, 2000a; Smith, Fischer & Sale, 2001) commented on the fragmented, adhoc (Leung, 1997) and atheoretical (Aycan, 2000a) state of the field. According to Aycan (2000a), research on international and cross-cultural organizational behaviour is reductionist (p. 111) in that it fails to acknowledge the complex nature of organizations and the influence of multiple environmental forces that are both internal and external to the organization. Frameworks are needed that incorporate variables at multiple levels in order to paint a fuller and more valid picture of how organizations operate in diverse regions of the world. Consequently, the present paper discusses theoretical and methodological challenges for developing and testing multi-level models that focus on organizational functioning across cultures. Some of the issues in this paper have been previously discussed by other authors (see for example work in Earley & Erez, 1997; see also Aycan, 2000a; Bond, 2001; Earley, 1994). However, we offer a new perspective by specifically referring to and discussing multi-level approaches to organizational behaviour across cultures. To illustrate some of

Organizational behaviour across cultures our points, we use a specific example, namely differences in the levels of extra-role behaviour across cultures, to show the benefits of using a multi-level framework.

The Cultural Challenge for Organizations The establishment of border-spanning economic blocs such as the North American Free Trade Area (NAFTA), Southern Cone Common Market (MERCOSUR), European Union (EU) or Association of Southeast Asian Nations (ASEAN) and the mobility of the workforce pose formidable challenges for organizations and their effective functioning (Aguinis & Henle, 1996). Hofstedes (1980, 2001) seminal work introduced four dimensions of national culture that can be used to describe cultural differences and guide managers in their efforts to make sense of cultural diversity. This four dimensions of individualism-collectivism, power distance, uncertainty avoidance and masculinity-femininity have attracted much attention, but in particular individualism-collectivism (Kagitcibasi, 1997; Triandis, 1995). Subsequent research (Chinese Culture Connection, 1987; Schwartz, 1994; Smith, Dugan, & Trompenaars, 1996) replicated most of these dimensions (see Smith & Schwartz, 1997; Smith & Bond, 1998 for summaries of these research projects; for critical reviews of Hofstede, see for example Chinese Culture Connection, 1987; McSweeney, 2002; Schwartz, 1994). This research at a national level was accompanied by a proliferation of research focusing on cultural variables at an individual level of analysis. Cross-cultural researchers frequently sampled participants in two or more geographical locations, measured a variety of psychological or organizational constructs and explained observed differences in terms of culture, often relying on post-hoc reference to Hofstedes findings (for reviews see, Smith, Fischer & Sale, 2001). Few attempts were made to integrate macro level and micro level research into so-called meso-theories (House, Rousseau & Hunt, 1995).

Organizational behaviour across cultures One of the few meso-theories was proposed by Kanungo and colleagues (Kanungo & Jaeger, 1990, Mendonca & Kanungo, 1994). They argued that socio-cultural variables such as individualism-collectivism and power distance influence the internal work culture of an organization, which in turn influences Human Resource Management Practices such as work design, performance management and reward system. A number of studies have attempted to test this model using one (Mathur, Aycan & Kanungo, 1996) or two (Aycan, Sinha & Kanungo, 1999) cultural samples. The most comprehensive test of the model was conducted by Aycan, Kanungo, Mendoca, Yu, Deller, Stahl and Kurshid (2000). The authors studied the effect of national culture dimensions on the internal work culture defined as employee-related assumptions in 10 different

nations. The individual level variables were job design, supervisory practices and reward allocation. The Aycan et al. (2000) study is an important step forward toward a better understanding of the complexity of organizations in an international perspective, yet suffers from some limitations that need to be addressed. First, the variables were measured and analysed at an individual level, although the theoretical framework incorporated the national, organizational, and the individual level. By not aligning their level of theory, measurement and analysis, Aycan et al.s (2000) research committed a so-called ecological fallacy (Hofstede, 1980; Klein, Dansereau & Hall, 1994). Ecological fallacies refer to inappropriate generalisation of theoretical findings across levels of analysis. For example, Aycan et al. (2000) measured and analysed their data at an individual level. This assumes that the individual responses are independent and are not influenced by other group characteristics (Klein et al., 1994). However, their theoretical rationale would not justify such an analysis, because they argued that culture refers to shared values, norms and beliefs (Aycan, 2000a). If participants from the same cultural group share perceptions about their cultural values and beliefs, their responses are not independent and this creates dependencies in the data at an individual level. These dependencies yield biased statistical estimates (Saddler & Judd, 2001) and researchers may draw erroneous conclusions based on these estimates. Consequently, the results

Organizational behaviour across cultures

reported by Aycan et al. (2000) have to be considered cautiously. Furthermore, they used regression analysis at an individual level and commented on the inconsistent results across samples. These inconsistencies are important because they indicate that effects differ across cultures. The theory proposed by Aycan et al. (2000) was supposed to be valid for all cultural contexts, therefore these inconsistencies threaten the generalisability of their theory. However, if it can be shown that these inconsistencies vary with national characteristics, the applicability of the model increases. Using hierarchical modelling techniques, such effects can be tested and incorporated (Hofmann, 1997). By using inappropriate methods, Aycan et al. (2000) missed an important opportunity to enhance our understanding of organizational behaviour across cultures. Their use of inadequate methodologies and the reliance on inappropriate statistical techniques makes their results open to alternative explanations. However, we would like to emphasise that this study marks a significant step towards more comprehensive and realistic models of organizational behaviour. Other theoretical frameworks (Erez & Earley; 1993; Erez, 1994, 1997; Gelfand & Dyer, 2000; Leung, 1997) incorporating individual, organizational and cultural variables have been proposed, though they fail to specify the precise level of the proposed effects and have not yet been tested empirically.

Multi-Level Research: Challenges and Potential Multi-level modelling refers to the exploration of the relationship between variables at different levels such as national, organizational and individual. These levels are thought to be nested within each other. Individuals are nested within organizations, and organizations are nested within countries. In contrast to this multi-level approach, previous research has focused primarily on the relationship between variables at the same level. Hofstede (1980) and Schwartz (1994) investigated how cultural dimensions relate to economic indicators at a national level. At an organizational level for example, researchers have been interested in how organizational process variables such as formalization, standardisation and centralisation relate to organizational outcomes such as

Organizational behaviour across cultures organizational innovation (Damanpour, 1991). Psychological research provides the prime example of individual level research by focusing on how variables such as personality, effort or attitudes predict other variables such as organizational citizenship behaviour (Organ & Paine, 1999) or

organizational commitment (Meyer, 1997) at an individual level. House et al. (1995) criticized such research because studying variables at only one level without considering the effect of other levels leads to deficient theories and biased empirical results and thus call for meso-theories that incorporate constructs from different levels. Although most researchers would agree that organizational phenomena are multi-level, it remains a substantial challenge to think both micro and macro and to incorporate multiple levels simultaneously (Kozlowski & Klein, 2000). The practical problems associated with the investigation of hierarchically ordered systems, such as organizations have been extensively discussed (for a recent review, see Klein & Kozlowski, 2000). Most often multi-level data is collected at the lowest level (the individual) and then aggregated (at an organizational or country level) for the testing of the respective theoretical hypotheses. But it has to be shown whether the meaning of constructs assessed at a lower level is equivalent to the meaning of the same construct at a higher level (e.g., House et al., 1995; Glick, 1985). These theoretical and practical problems raise the issues of (a) how to formulate appropriate multi-level theories, (b) the appropriate data collection and aggregation strategies and (c) the appropriate tools for investigating theoretical relationships. In the following, we will try to outline some answers to each of these problems. Developing Multi-Level Frameworks In the following sections, we will describe the development of a new multi-level model intended to explain cross-cultural variation in work attitudes and behaviour. In line with Aycan (2000a) and Ostroff and Bowen (2000), we propose that national culture influences work attitudes and behaviour mainly indirectly through organizational practices. Therefore, we propose that

Organizational behaviour across cultures national culture effects on work behaviour are mediated by organizational culture and practices. In the following, we describe the proposed relationships in detail. We will be following recommendations by Kozlowski and Klein (2000) for developing multi-level models, by specifically providing an example that can be empirically investigated. Furthermore, our focus on national culture as the highest theoretical level raises additional issues that need to be addressed when developing multi-level models (see Chao, 2000)

The Identification of Central Variables Kozlowski and Klein (2000) urged researchers to start by thinking about their endogenous constructs of interest when developing multi-level frameworks. The endogenous or dependent variable drives the specification of necessary levels, constructs and processes within a theory. Here we will focus on a key organizational variable, namely extra-role behaviour (Van Dyne & Le Pine, 1998). Extra-role behaviour is behavior which benefits the organization and/or is intended to benefit the organization, which is discretionary and which goes beyond existing role expectations (Van Dyne, Cummings, & McLean Parks, 1995, p.218). Organ and Paine (1999) argued that ensuring high levels of extra-role behaviour increasingly becomes one of the most important aspects for organisations. Differentiating between different aspects of extra-role behaviour, Van Dyne et al. (1995) contrast promotive with prohibitive behaviour as well as affiliative with challenging behaviour. Helping is an example of promotive and affiliative behaviour. It is proactive interpersonal behaviour directed towards others and strengthening relationships. Voice is an example of challenging and promotive behaviour, such as speaking up with suggestions for change, challenging work routines that hinder effectiveness and acting on ones own initiative to make changes to ones own task routines. Therefore, this proactive approach that promotes, encourages and causes things to happen might damage relationships. The usefulness of both dimensions and their empirical distinctiveness in the US have been shown by Van Dyne and LePine (1998).

Organizational behaviour across cultures Having identified the dependent variables, it is also important to determine which variables are likely to influence the dependent variables. In particular, researchers need to address whether

multilevel theories are needed to understand the phenomena at hand or whether a single-level theory would be more parsimonious (Kozlowski & Klein, 2000). Therefore, the next section will address these two issues of (a) the necessity of using a multi-level framework and (b) the identification of variables likely to influence the dependent variable at different levels. Appropriateness of a multi-level framework: There is empirical evidence that higherlevel variables are likely to exert influence on extra-role behaviour. Extra-role behaviours have been shown to depend particularly on interpersonal aspects of organizations, especially leadership (Deluga, 1994) and organizational support (Bettencourt, Gwinner, & Meuter, 2001). Work context effects (associated with departmental and work group variables) have been reported and accounted for more variance in extra-role behaviour than did attitudes or personality variables (LePine & van Dyne, 1998; Schnake, Cochran, & Dumler, 1995). Therefore, these study show that an investigation of organizational effects on levels of extra-role behaviour is clearly indicated. To the best of our knowledge, no empirical research has so far addressed to what extent organizational culture or organizational practices influence extra-role behaviour. Empirical studies are needed to address this gap. Additional to these organization level effects, socio-cultural variables are also likely to have an effect. For example, some aspects of extra-role behaviour are likely to be seen as closer related to ones core job in Eastern cultures than they are in the West (Lam, Hui, & Law, 1999). This implies that employees in some cultures are more likely to engage in such behaviours than in others. Cultural dimensions in turn have been found to explain extra-role behaviour at an individual level (Moorman, & Blakely, 1995; Van Dyne, Vandewalle, Kostova, Latham, & Cummings, 2000). The extant literature suggests that there is a moderate to strong relationship between extra-role behaviour at an individual level and contextual variables at an organizational and national level.

Organizational behaviour across cultures 10 Thus, it is necessary to explore the effects of contextual variables on these individual level variables in more depth, justifying the development of a multi-level framework. Organizational level variables: Organizational practices are variables at an organizational level that are closely related to organizational culture (see Hofstede, Neuihen, Ohayv, & Sanders, 1990 for a discussion of the relationship between organizational culture and practices). Organizational culture refers to the way things are done in an organization (Verbeke, Volgering, & Hessels, 1998). Organizational members have shared organizational beliefs, norms and values that are expressed in organizational behaviours, and practices. These organisational practices will influence the work attitudes and behaviours of individuals. New members are socialised into an organization and learn these values and norms by observing and following practices and norms. By doing this they internalise some or most of these underlying values (Schein, 1990). Therefore, we specify organizational practices as an organization level construct. Our interest focuses on how specific organizational practices influence extra-role behaviour of employees. Therefore, it is necessary to provide an overview of relevant dimensions. There has been a proliferation of research on organizational culture and numerous dimensions have been proposed (Askanasy, Broadfoot, & Falkus, 2000). Various reviews have independently tried to integrate these dimensions (Ashkanasy et al., 2000; Delobbe, Haccoun, & Vandenberghe, 2001; Detert, Schroeder, & Mauriel, 2001; Schein, 1990). Table 1 presents a summary of these higher order dimensions and cluster of dimensions identified in these reviews, ordered by their theoretical focus and content. As can be seen there, there seems to be a core number of dimensions of similar content that can be used to describe organizational culture. Consequently, these general dimensions seem to cover most if not all relevant aspects of organizational culture. However, it has to be decided which of these dimensions and which specific practices associated with organizational cultures are most relevant for extra-role behaviour. This will be discussed in the next section, after we have introduced the socio-cultural variables of interest.

Organizational behaviour across cultures 11 Insert table 1 about here

National culture level variables: Culture has been defined as the collective programming of the mind (Hofstede, 1980) or as a system of shared or complimentary meanings (Rohner, 1984). In line with other authors (Hofstede, 1980; Schwartz, 1994), we see shared values within a particular culture as an indicator of national culture. Hofstede (2001) has argued that power distance and uncertainty avoidance are the most important dimensions for organizations. Power distance is relevant for determining who decides what and uncertainty avoidance is important for assuring that what should be done will be done. However, power distance might have different components. One component is the acceptance of hierarchical relationships as originally proposed by Hofstede (1980). A second component of power distance is the concept of paternalism (Aycan, 2000b). Paternalism refers to dyadic and clearly differentiated hierarchical relationships between superiors and subordinates within a society. Supervisors provide guidance, protection, nurturance and care to the subordinate, and the role of the subordinate, in return, is to be loyal and deferent to the supervisor (Aycan et al., 2000; p. 197). It should be noted that paternalism implies deference on behalf of the subordinate as long as the superior provides guidance, protection and support. At the same time, supervisors have only legitimate authority as long as they provide this support and protection function. Therefore, we argue that power distance comprises the mere acceptance of and deference to hierarchical relationships whereas paternalism refers to a mutual supporting relationship between individuals at different hierarchical levels within a culture. Fatalism is another less commonly studied variable. Aycan et al. (2000) conceptualised it as the belief that it is not possible to control outcomes of ones action, implying that trying too hard to achieve something, making long-term plans, and taking preventative action are not worthwhile exercises (p.198). This dimension is related to uncertainty avoidance (Hofstede, 1980) and locus of control (Rotter, 1966). Fatalism is an important cultural dimensions with implications for

Organizational behaviour across cultures 12 organizations. Not being proactive, taking initiatives or making long-term plans is likely to negatively affect the performance of organizations. Therefore, this dimension has potential for understanding organizational behaviour across cultures.

Proposed Relationships between Theoretical Variables Having identified variables of interest, researchers need to specify links between constructs at different levels. Top-down processes (Kozlowski & Klein, 2000) are most commonly used in the literature. In the current example, we propose mediation effects (Krull, & MacKinnon, 2001). Organizational practices are thought to act as a mediator between national culture and work attitudes and behaviour (cf. Aycan, 2000a). The effect of organizational practices on individual work variables: Extra-role behaviour has been linked to organizational support (Bettencourt, Gwinner, & Meuter, 2001). LePine and Van Dyne (1998) showed that smaller groups with more possibilities for interaction and mutual identification had higher levels of voice behaviour. Self-managed work groups in their study also had higher levels of voice behaviour. Self-managed work groups are characterised by selfregulation, greater autonomy and discretion, feelings of personal responsibility and shared decisionmaking (LePine & Van Dyne, 1998). These characteristics are closely related to control dimensions of organizational culture. Therefore, it seems that practices dealing with most effective ways of organizing work are relevant for helping behaviour. In an organization with a strong team focus and an emphasis on support and helping (e.g., Hofstede et al., 1990; OReilly, Chatman & Caldman, 1991; Verbeke, 2000), employees will be more likely to help others beyond their individual task requirements. Second, the innovation dimension might be relevant for predicting voice. A focus on excellence and innovation (e.g., Denison & Mishra, 1995; OReilly et al., 1991; van Muijen et al., 1999) will encourage individuals to come forward with new ideas and they will express more voice behaviour. The control dimension is also relevant. Increased participation in an organization and

Organizational behaviour across cultures 13 norms about open communication will provide more opportunities for individuals to voice their opinions and an atmosphere where they can openly make suggestions. Proposition 1: More support at an organizational level (work organization dimension) is associated with more helping behaviour at an individual level. Proposition 2: Greater participation at an organizational level (control dimension) is associated with more voice behaviour at an individual level. Proposition 3: Open communication at an organizational level (control dimension) is associated with more voice behaviour at an individual level. Proposition 4: Innovation at an organizational level (innovation dimension) is associated with more voice behaviour at an individual level. The effect of national culture on organizational practices: Organizations do not operate in a social vacuum but are influenced by the socio-cultural context (Hofstede, 2001; Hofstede et al., 1990). Therefore, the socio-cultural dimensions at a national level are likely to influence the dimensions of organizational practices selected for the present framework. First, we predict that power distance is negatively related to participation and open communication. Employees in cultures high on power distance are not expected to participate directly in decision-making. Organizational structures are characterised by top-down communication and higher formalization and central control (Hofstede, 2001). Individualism is also expected to lead to greater emphasis on outcomes and rewards (Smith & Bond, 1998). In individualistic societies, people expect to be rewarded in line with their individual contribution; individual performance appraisals are common, competition is important and organizations assume that employees are motivated by economic and material incentives (Hofstede, 2001; Triandis, 1995). This emphasis on rewards and outcomes should be accompanied by a neglect of support mechanisms for employees and little orientation towards people. Individualism is associated with a concern for tasks and not with support for employees (Hofstede,

Organizational behaviour across cultures 14 2001). Work is centred around individuals and not groups (Triandis, 1995). Consequently, we predict that individualism is associated with lower levels of support. Paternalism is likely to result in a greater concern for people and support. The mutually dependent relationship between superiors and subordinates in a culture will lead to an emphasis on relationships and people. Superiors are concerned with the well-being of individual employees. Therefore, paternalism is expected to lead to higher levels of support. Finally, fatalism is predicted to lead to lower levels of innovation practices in organizations. In a cultural environment with strong belief that things will happen anyway and where individuals have little perceived control over events, organizations may also be less proactive and innovation oriented. Proposition 5: Power distance at a national level will lead to less participation and open communication at an organizational level. Proposition 6: Paternalism at a national level will lead to more support at an organizational level. Proposition 7: Individualism at a national level will lead to less support at an organizational level. Proposition 8: Fatalism at a national level will lead to less innovation at an organizational level. Integration of the hypothesised relationships: Figure 1 presents all the hypothesised relationship graphically. As can be seen there, the effects of socio-cultural dimensions are expected to be mediated through organizational practices. In line with Ostroff and Bowen (2000), we expect that the socio-cultural environment shapes organizational practices and that the influence of sociocultural dimensions on work attitudes and behaviours is most likely to be mediated through organizational practices. This is also compatible with Aycans (2000a) critical review of previous cross-cultural I/O psychology as well as the empirical work by Aycan et al. (1999, 2000).

Organizational behaviour across cultures 15 Insert figure 1 about here

Methodological and Statistical Issues for Multi-Level Research Defining Multi-Level Constructs at the Appropriate Level It is important to specify the level of theory and the level of constructs within the theory. Kozlowski and Klein (2000) stress that the first and foremost task in crafting a multilevel theory or study is to define, justify, and explain the level of each focal construct that constitutes the theoretical system (p. 27). Klein et al. (1994) pointed out that most constructs in organizational science are ambiguous in terms of their appropriate level. In the previous sections, we outlined a number of variables and made some propositions about their relationship. However, we have not addressed yet whether we identified each variable at the most appropriate level for our example. Therefore, we will briefly consider the appropriate level for each set of constructs. First, extra-role behaviour is the discretionary behaviour of individuals to go beyond what is expected by them based on their formal roles (Organ & Ryan, 1995; Van Dyne et al., 1995). Therefore, by definition, extra-role behaviour is an individual level construct. Concerning higher-level constructs, it has to be shown whether the constructs are specified at the appropriate level. Two questions are of particular importance. It has been debated whether the theoretical units (e.g., groups) correspond to real units and their formal or informal boundaries (Glick, 1985; Patterson, Payne, & West, 1996). For example, can organizations be described and distinguished from other organizations in terms of their dominating practices? Furthermore, the strength or inclusiveness of the different levels has been discussed (House et al., 1995). For example, how strongly are individuals influenced by the national culture of the country they live in? These questions are important for specifying multi-level constructs and especially the second one poses considerable problems for cross-cultural multi-level research (Chao, 2000).

Organizational behaviour across cultures 16 Socio-psychological significance of aggregates: As found by Patterson et al. (1996), formal units that can be defined with relative ease based on formal group boundaries (e.g., groups working together) might not correspond to psychological group boundaries. Studying national cultures, cross-cultural research often implicitly assumes national culture is confined and defined by geographical and socio-political boundaries (Smith & Bond, 1998). This view implies that national culture is a more or less homogenous entity and subcultures are negligible. However, socio-political boundaries are often relatively arbitrarily defined, are often unrelated to ethnic and cultural boundaries (e.g., post-colonial nation states that do not correspond to ethnic and cultural boundaries) and continue to change due to political and social instabilities (e.g., the former Soviet Union or Yugoslavia). Although both Hofstede (1980, 2001) and Schwartz (1992, 1994) admit that subcultures might exist, they still provide only superficial justification for their culture-level approach. Furthermore, globalisation with accompanied ease of migration and mass-communication has led to a greater exposure of individuals to different cultures in most societies. This provides a formidable challenge for cross-cultural psychology. In the following we try to address some of these issues. To overcome some of these previously mentioned problems related to national culture and organizational practices, participants can be asked to identify their ethnic, cultural and organizational identity. Such data can be meaningfully incorporated in theoretical frameworks and statistical analysis. For example, it can be investigated whether minority members agree with majority members. Statistical techniques to do this are available (James, Demaree & Wolf, 1984, 1993; Shrout & Fleiss, 1979). Divergent views or subcultures can be integrated in model building and the effect of this variation can be tested (Colquitt, Noe & Jackson, 2002; Lindell & Brandt, 2000). Related to this point, it is crucial to assess the homogeneity of answers within a specific unit of interest (organization, culture) before aggregating responses. In case of emerging heterogeneity

Organizational behaviour across cultures 17 of responses, this variance might provide further meaningful information and might be integrated in theory testing. Lindell and Brandt (2000) argued that consensus within groups (e.g., variance) would moderate the impact of the strength of opinions within the groups (e.g., mean level). Colquitt et al. (2002) found supporting evidence for this mechanism. Studying work groups in organizational settings, the authors found that the effect of climate was stronger if members of work groups shared a common climate perception. We might expect similar effects at a national level. If there is a strong and homogeneous cultural belief, the cultural norms will be more influential than if members do not share a common culture. Therefore, we predict that the effect of socio-cultural context variables on organizational practices is weakened (a moderator effect) when sizeable subcultures exist and little agreement about a dominant culture exists. Consensus or agreement about a common national culture will moderate the effect of national culture on work practices. Similarly, turning to the effect of organizational practices on individual attitudes and behaviour, it is necessary to establish whether there is agreement within the organization about the dominant organizational practices (Klein, Conn, Smith, & Sorra, 2001). We predict that consensus will strengthen the impact of organizational practices on individual work behaviour and attitudes. Disagreement will weaken the link between organizational practices and work behaviour and attitudes. Proposition 9: Value consensus within a national culture will strengthen the link between national culture and organizational practices. Proposition 10: Consensus about organizational practices will strengthen the link between organizational practices and individual level work behaviour. Inclusiveness of levels applied to national cultures: The traditional approach to multi-level modelling relies on the assumption that lower level units are nested within the higher level. House et al. (1995) called this inclusiveness. They argued that effects of superior level on the lower levels will increase with the level of inclusiveness. Inclusiveness is increased when members of a unit spend more time proportionally within the higher unit than with other units, when members of a

Organizational behaviour across cultures 18 lower unit are under constant influence of the higher-level unit, when members are attracted to each other or when resources and information are shared. Applied to national culture, this implies that organizations (and their members) operate mainly within their native socio-cultural context rather than in another socio-cultural context (e.g., country), are continuously exposed to the influence of their own native national culture, that members within a socio-cultural environment as well as within an organization are attracted to each other, and finally, that resources and information are shared. However, the reality is often slightly different and this hierarchy of levels might break down (Chao, 2000). For example, organizations often operate subsidiaries in other countries and employees in subsidiaries are exposed to both the socio-cultural environment prevalent in a given country as well as the organizational structures imposed by the multinational organization that has been shaped by a different socio-cultural environment. At the same time, many organizations have a mixed work force with employees coming from different ethnic and cultural backgrounds. Expatriate managers, foreign specialists and experts work with host-nationals and thereby exert considerable influence. Attraction and cohesion is lower in diverse work groups (Williams & OReilly, 1998). Many leaders and CEOs (especially within the developing world) have been trained in Western European or North American institutions. Upon returning to their country of origin they try to implement management techniques that were developed in different socio-cultural environments. Therefore, the commonly assumed hierarchy in multi-level models of organizations is not so clear when including socio-cultural variables. We would expect that the effect of sociocultural variables on organizational practices is stronger in indigenous (owned and operated by nationals) organizations than in multinational organizations. Therefore, the status of the organization (multinational versus indigenous organization) is expected to be a moderator of all the relationships between socio-cultural dimensions and organizational practices.

Organizational behaviour across cultures 19 Proposition 11: The effect of national culture on organizational practices will be stronger for indigenous organizations compared with multinational organizations. Secondly, it seems useful to include diversity measures at an organizational level (percentage of ethnic and cultural minority employees) as well as indicators of whether organizations adopt Western style management models, the number of foreign nationals within the work force as specialists, advisors or experts and the country where the top leaders have been educated. This information can be obtained from company records, public relations material and through interviews with top managers. Similar to the previous hypothesis, we predict that these measures of diversity and impact of foreign management techniques will moderate the effect of socio-cultural variables on organizational practices. Organizations with a diverse work force and strong influence of foreign management techniques are expected to be less influenced by sociocultural variables. Proposition 12: Organizational practices of an organization with a culturally diverse work force are less strongly influenced by national culture compared with less diverse organizations. Proposition 13: The impact of national culture on organizational practices will be weakened if the organization is strongly influenced by foreign management techniques.

Measurement of Multi-Level Constructs Measuring concepts at the appropriate and intended level is crucial. In the following, we will review and outline some the issues related to measuring variables at different levels. Concerning our individual level variables, they were previously defined, conceptualised and measured at an individual level. Variables at an organizational and national level are more difficult to measure and therefore, we will concentrate on these issues.

Organizational behaviour across cultures 20 We conceptualised organizational practices as an organizational level variable. However, numerous researchers have debated whether higher-unit constructs are actually measured at and aggregated to the right level (Glick, 1985; James, 1982; Klein, et al., 1994; Kozlowski & Klein, 2000). Chans (1998) work on composition models is helpful for determining and measuring the appropriate level of organizational practices. Composition models specify the functional relationship among phenomena or constructs at different levels of analysis that reference essentially the same content but that are qualitatively different at different levels (Chan, 1998, p. 234). Therefore, composition models are concerned with the content of dimensions as well as the phrasing of items and can help to provide conceptual precision in construct development and measurement. Five models were discussed by Chan (1998) which can be grouped in three different basic types (Kozlowski & Klein, 2000), two of which are relevant for our purposes. First, global unit properties are relatively objective, descriptive and easily observable single level phenomena that originate at the respective unit level. For example, the number of minority employees in an organization is a global unit property. Second, shared unit properties are the characteristics that are common to and shared by members of a unit, such as organizations. Consequently, the relevant unit is the organization. Items should be phrased so that they direct the attention of respondents to the predicted level of the theory (Klein et al., 1994,). Hence, the relevant composition model is a referent-shift consensus model (Chan, 1998). The referent is the organization, but the data is obtained from respondents at the lower level, namely the individual members of an organization. These answers are then combined to represent the higher level construct. Within-group consensus (James et al., 1984; George & James, 1993) as well as between group variability (Yammarino & Markham, 1992) are needed to ensure that the measured data (obtained from the lower level, e.g., individuals) can be used to represent the higher level (e.g., organizations). Researchers should test the consensus or homogeneity assumption (Klein et al., 1994) in their studies to justify aggregation.

Organizational behaviour across cultures 21 Turning to socio-cultural variables, culture is often conceptualised as collective programming of the mind (Hofstede, 1980). The definition as well as the aggregation of values to a culture level implies homogeneity (Klein et al., 1994). However, most culture-level research has failed to test this assumption (Bond, 2004; Hofstede, 1980; Schwartz, 2004; Smith et al., 1996). Correlations of such aggregated scores with economic indices are taken as an indicator of validity (Hofstede, 2002), although the reliabilities at an individual (Hui, 1988) or cultural level (Spector, Cooper, Sparks, et al., 2001) have been shown to be questionable. The problem of the appropriate level is aggravated by the fact that conceptually similar socio-cultural dimensions have also been conceptualised at an individual level (e.g., Hui, 1988; Schwartz, 1992; Singelis, 1994; Singelis, Triandis, Bhawuk, & Gelfand, 1995; Triandis & Gelfand, 1998; Triandis, McCusker & Hui, 1990). Dimensions identified at an individual level are interpreted to reflect psychological dynamics of conflict and compatibility that individuals experience in the course of pursuing their different values in everyday life (Schwartz, 1994, p. 92). In contrast, culture-level dimensions are supposed to reflect properties of larger social structures (Hofstede, 1980), like regulation of human activities or the emphasis of institutions within a larger social structure. In line with Bond (2001), Klein et al. (1994) and Fischer (2004), we argue that this necessitates items asking individuals about their culture, rather than items addressing individual preferences and characteristics. Research by Fischer (2004) has shown that individuals are able to provide reliable and valid reports on their national cultural characteristics. Consequently, we would recommend that researchers more clearly differentiate between individual and culture levels of theory and analysis by phrasing cultural items at a culture level. Finally, most previous culture level research has neglected the issue of consensus or agreement (for exceptions see Brodbeck, Frese et al., 2000; Fischer, Smith, & Richey, 2003) that would indicate the presence of heterogeneous subcultures or a fragmented culture. To ensure that variables can be aggregated to a culture level, researchers should consider not only reliabilities at an

Organizational behaviour across cultures 22 individual, but also agreement (within-unit homogeneity) at an individual level as well as cultural differences between countries (between-unit heterogeneity). If respondents from a specific cultural background agree with each other about certain cultural values, and groups of cultures can be differentiated on the basis of these perceptions (there are significant mean differences across groups), this would indicate that these perceptions are characteristics that can be used to describe the particular groups. Therefore, an aggregation of answers to the national culture level would be justified.

Sampling Efforts to ensure adequate sampling is crucial for any theory testing efforts, however, sampling issues are even more important and complex for multi-level models compared with individual level models because researchers need to ensure that samples show adequate variability for all constructs of interest at all relevant levels in their model (Kozlowski & Klein, 2000). This constitutes a formidable challenge for multi-level research, especially when involving national culture as one of the explanatory variables of interest. The primary goal is to ensure that samples have within-unit homogeneity and between-unit variability. In the next few sections, we describe various variables that might influence both factors and strategies to ensure adequate sampling. Addressing the problem of between-unit variability, Georgas and Berry (1995) argued that cross-cultural psychologists should sample nations that show sufficient differences. Georgas and Berry (1995) clustered countries using eco-cultural indices related to ecology, economics, education, mass communication, population and religion. Ronen and Shenkar (1985) reviewed and synthesised previous studies that used attitudinal data and clustered individual countries into sets of similar country clusters. They identified seven major clusters (Near Eastern and Arab, Nordic, Germanic, Anglo, Latin European, Latin American, Far Eastern) with four independent countries (Brasil, Japan, India, Israel). Hickson and Pugh (1995) suggested adding two more clusters, namely

Organizational behaviour across cultures 23 an East-Central European and a Developing Nations cluster (India, African and South-East Asian countries). Therefore, researchers should attempt to sample at least one country from each of the major clusters. This will enhance cross-cultural differences and between-unit variability. Assuring within-unit homogeneity, is more problematic. In times with radical societal and economic upheavals and changes, extraneous variables are likely to affect responses and participants might not be able reach consensus, threatening the within-unit homogeneity assumption. Collecting data from individuals in countries undergoing radical economic or political changes might not allow aggregation to higher units. However, the question of how much change is too much has not been addressed in the literature with reference to multi-level modelling. For example, Eastern European nations underwent radical transformations during the late 1980 and mid-1990s. These changes are on-going, however it could be assumed that processes have been stabilised by now and participants have become accustomed to the new life. Schwartz and Bardi (1997) went even further by suggesting that cultural values prevalent in a society are stable and are not easily influenced by even such dramatic changes as in Eastern and Central Europe. Schwartz and Sagie (2000) provided some evidence that both democratisation and economic development have an influence on value consensus within nations. They found that increased socioeconomic development is associated with greater cultural consensus, whereas increased democratisation leads to greater value disagreement. Socio-economic development and democratisation are inversely related (Schwartz & Sagie, 2000), so it is hard to increase withinculture homogeneity through selective sampling. Furthermore, the events of 11/09 and subsequent developments have led to polarisation of value orientations on a global scale. According to social identity theory (Hogg & Abrams, 1988), many of these events are considerable threats to group identity, which is likely to lead to strengthened cultural identities. These events might have resulted in greater within-unit (within-cultural) homogeneity. Schwartz and Sagie (2000) did not focus on such radical and polarizing events, therefore, in absence of any large scale investigation of the

Organizational behaviour across cultures 24 impact of these events, careful attention to current political and economic events has to be paid during data collection efforts. At an organizational level, researchers should attempt to obtain comparable samples from countries that reflect dominant subcultures, samples show strong within-group agreement (at an organizational level); there is sufficient differentiation across organizations and the organizations samples are relevant to the theory being tested. Since Chatman and Jehn (1994) demonstrated that industry has a significant impact on organizational culture, organizations across a variety of industries should be sampled. One of the major problems in comparative cross-cultural research is that samples are often not directly comparable. However, such differences might already be indicators of cultural differences (Smith & Peterson, 2002). For example, in feminine cultures, participation of women in the workforce is higher, compared with more masculine cultures (Hofstede, 2001). The dominance of public sector organisations within an economy might be explicable by cultural characteristics (Sinha, 1992). Such differences are expressions of cultural differences rather than error variables in the common sense. Therefore, sampling should focus on organizations that maximize variability between organizations within a country, but show some representative in terms of dominant subcultures and industry characteristics within the country. Addressing the issue of within-unit homogeneity (agreement about practices within organizations), employees have to be able to assess the organizational practices and reach adequate consensus concerning these practices. This again depends on a number of factors. For example, at an individual level, recently recruited members might not be able to report on organizational practices since they are still in their socialisation stage (Levine & Moreland, 1994). Newly founded organizations or organizations undergoing restructuring or merging with other organizations would not constitute ideal research partners since organizational practices might not be crystallized or are changing at the moment of investigation (Kozlowski & Klein, 2000). Larger organizations might be less homogeneous due to less interaction between units or departments and their individual

Organizational behaviour across cultures 25 members and less interdependence (Klein et al., 2000). It is important to sample employees that are knowledgeable about organizational practices. Concerning the size of organization, the effect of size on homogeneity has to be empirically established (by relying on indicators of within-unit or within-organizational agreement). As presented before, agreement can be used as a moderator because it can be meaningfully integrated in a theoretical multi-level framework.

Data analytical strategy Various data analytical strategies exist to test multi-level effects and they have to be matched to both the theoretical framework, assumptions about the type of construct as well as data sampling and research methodologies (Kozlowski & Klein, 2000). Our theoretical framework is concerned with top-down processes whereby higher level units are influencing lower level units. The common approach is to measure variables at the lowest level of analysis using survey methods and then aggregate responses at the respective level of interest. Once aggregated, the theoretical relationships are tested. The data analytical technique best suited for this approach is random coefficient modelling (Kozlowski & Klein, 2000) or shorter, multi-level modelling (Bryk & Raudenbusch, 1992; Hofmann, 1997; Raudenbush & Bryk, 2002). The assumptions of within-unit homogeneity can be tested using both intraclass correlations (Fleiss & Shrout, 1979) and the coefficient of interrater agreement rwg (James et al., 1984, 1993). Between-unit variability can be established using ANOVA methods. These statistical details are discussed elsewhere (Hofmann, 1997; Hoffmann, Griffin, & Gavin, 2000; Hox, 1995; Raudenbush & Bryk, 2002) and the interested reader is referred to consult these sources.

Conclusions The present paper was concerned with reviewing theoretical and methodological issues for conducting multi-level research with a specific focus on national culture. Furthermore, it illustrated

Organizational behaviour across cultures 26 some of the main points by attempting to develop a theoretically derived meso-level model of organizational behaviour that can be empirically tested. This framework integrates variables at the national and organizational level to explain variation in work behaviours at an individual level. This framework is in line with previous work, but expands it by specifically focusing on level of theory and analysis issues. Empirical work based on this model will be of great importance for both practitioners and academics because it provides a better understanding of the relationship between national culture, organizational practices and employee behaviour. For example, managers interested in understanding levels of voice can identify relevant organizational and socio-cultural dimensions. Levels of voice might be raised by changing the organizational practices of an organization (more participation and open communication) in line with prevalent cultural norms within a culture. From a theoretical perspective, the framework acknowledges the complex nature of organizations and the influence of multiple forces that influence work behaviour. Aycan (2000a) criticized the reductionist and atheoretical state of theory and research in international organizational behaviour. This framework is a step toward more comprehensive and integrated models to address this problem. Various issues for developing and testing multi-level models involving culture as an explanatory variable have been discussed and it is hoped that researchers will increasingly use this powerful theoretical and methodological tool for their investigations of organizational phenomena.

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Organizational behaviour across cultures 37

Table 1. A summary of taxonomies of organizational culture dimensions Summary Schein (1990) Detert, Ashkanasy, Schroeder, Broadfoot & Mauriel (2000) Falkus (2000) Environment: internal versus external focus and orientation Innovation: Concern with stability and predictability versus innovation and organizational change Truth: Definition of truth and knowledge Time: Definition of time and time horizons (past, present, future) Motivation: Assumptions about human nature and motivation of employees Work organization: Assumptions about most effective ways of organizing work (individually, teams) Diversity: Focus on diversity or homogeneity within groups Tasks vs people: Centrality of work and task Control: Degree of formalization, sharing of control and responsibilities The organizations relationship to its environment The nature of human activity The nature of reality and truth The nature of time The nature of human nature The nature of human relationships Homogeneity versus diversity Orientation to work, task and co-workers Control, coordination and responsibility Humanistic workplace; Job performance Structure; Leadership; Communication Orientation and focus internal and/or external Stability versus change/innovatio n/personal growth The basis of truth and rationality in the organization The nature of time and time horizon Motivation Environment

Delobbe, Haccoun, & Vandenberghe (2002)

Innovation

Innovation

Planning Socialisation on entry; development of the individual

Isolation versus collaboration/coo peration

People orientation; Results/outcome orientation Control

Organizational behaviour across cultures 38 Figure 1. Expected mediator relationships between socio-cultural dimensions, organizational practices and work attitudes and behaviour Power distance
_ _

Fatalism

Individualism

Paternalism

Participation

Open Communication

Innovation

Support

Voice behaviour

Helping behaviour

Note: A minus sign denotes a negative relationship between variables, e.g., power distance at a national culture level is expected to lead to less participation at an organizational level; a plus sign denotes a positive relationship, e.g., innovation at an organizational level is likely to lead to more voice behaviour at an individual level. See the text for further explanations.