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The Same the World Over: Focusing on Customers and Innovation Brings Success
Do successful firms in different countries share cultural traits? HBS professor Rohit Deshpandé's long-standing interest in this and related research has led him, with Professor John U. Farley of Dartmouth's Amos Tuck School, to examine the forces at work in companies across several Asian nations.
In a previous study of companies in Great Britain, France, Germany, Japan, and the United States, Deshpandé and colleagues from Tuck found that the most successful firms in these diverse countries had remarkably similar corporate cultures. Innovation, the researchers learned, was the strongest driver of performance in these organizations, regardless of nationality.
Eager to determine whether this finding would also hold true among developing economies, Deshpandé and Farley have expanded their study to include information they gathered from five hundred executives of firms based in China, Hong Kong, India, Thailand, and Vietnam. Together with the information acquired earlier from Tokyo-based companies, these findings will be published in a forthcoming paper.
The original study looked at the impact on business performance of four "strategic levers" - corporate culture, organizational climate, customer orientation, and innovation. "Corporate culture was perceived as the prevailing set of shared values held by a firm's managers," Deshpandé explains, "qualities such as loyalty and tradition. We defined climate as the nature of the workplace environment itself - for instance, an open and trusting atmosphere with decentralized decision-making."
In the initial study, Deshpandé and his colleagues found significant differences in the way companies operated from one nation to another. "But a more important discovery was that the most successful companies all shared a competitive, achievement-oriented culture," Deshpandé notes. Would this hold true among Asian firms?
For the purposes of the Asian study, the researchers labeled four basic culture types - Tigers, Rabbits, Monkeys, and Elephants - within the corporate culture lever.
The Tiger culture tends to be achievement-oriented and competitive, while the Rabbits are more flexible, creative, and entrepreneurial. Monkey and Elephant cultures reveal a more inward focus, with Monkeys epitomizing teamwork and loyalty, while Elephants favor strong hierarchies, organization, and order.
As in their first study, Deshpandé and Farley found that in Asia, the prevalent organizational culture varies among countries. "While we had previously seen that Japanese firms, for instance, typified the clan-like culture symbolized in the Monkey," remarks Deshpandé, "we found that Chinese companies tended to be more formally organized (Elephants), yet also entrepreneurial (Rabbits). However, we also discovered that joint-venture firms in China were more competitive and less bureaucratic than state-owned enterprises." Despite these differences, the similarities of corporate culture among the most successful companies continued to prevail - even when the companies were state-owned.
The role of innovation among high-performance companies in developed nations notwithstanding, Deshpandé points out that the most significant lever among emerging-market firms is customer-orientation. He also notes that the consistently high emphasis on marketing found among the most successful Asian firms in the study appears to hold true across the board - in consumer goods organizations, industrial firms, product companies, and service providers alike, without regard to the size of the firm. In each environment, the reigning corporate culture was market-driven and competitive.
Explaining the cultural consistency among high-performing companies throughout the world, Deshpandé observes, "Assigning top priority to innovation and customer orientation really does pay dividends. It is also clear that building and sustaining a strongly entrepreneurial culture drives companies toward success and high performance." But he cautions that no organizational culture should be of just one type. In the ideal corporate culture, there is room for Tigers, Monkeys, Rabbits, and Elephants to coexist. "The best representation of all," Deshpandé posits, "may be the Dragon, a common icon in Asia that combines the disparate and frequently beneficent attributes of lesser beings into one of extraordinary capability and power. In the best companies, the whole is truly the sum of several parts."
(Adapted from article that appeared in the Spring 1999 edition of Working Knowledge, a publication of the HBS Division of Research.)
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