National and Organizational Culture

The emphasis on the central role of national culture has continued in recent years. For example, the most recent large scale project, GLOBE (House, Hanges, Javidan, Dorfman, & Gupta, 2004; Javidan, House, Dorfman, Gupta, Hanges, & de Luque, 2004), while not explicitly using the term 'constraint', emphasizes that the relationship between national culture and organizational culture is strong with organizations mirroring the countries where they are found, which seems consistent with the idea of a constraint.

Johns (2006: 396) states explicitly that 'national culture constrains variation in organizational cultures'. His argument relies significantly on empirical work by Hofstede (1980, 2001) and on the work by Chatman and Jehn (1994), the latter who concluded that industry explained a substantial portion of the variance in organizational culture. Accordingly, Johns argues that 'the contextual imperative suggested by these findings stands in sharp contrast to the common view that cultures are shaped essentially through internal processes' (2006: 396).

There are, however, several issues with these conclusions. First, Gerhart and Fang (2005), in their re-analysis of Hofstede's data, show that country differences explain only a small percentage of the variance in individual level cultural values, suggesting that mean differences between countries are small relative to differences (i.e., variance) within countries. This considerable within-country variance at the individual level would be expected to contribute to variance in organizational cultures. Second, Gerhart (2008), in his re-analysis of Chatman and Jehn's (1994) data collected in the USA, shows that organizational differences, in fact, explained more variance in cultural values than did industry differences. This re-analysis casts doubt on the argument that organizational differences in culture are as constrained as is believed. Additional evidence shows considerable variation in organizational culture and strategies within other countries such as China (Krug & Hendrischke, 2008; Tsui, Wang, & Xin, 2006), suggesting room for managerial discretion. Third, no empirical research to date actually provides a direct estimate of the magnitude of the relationship between national culture and organizational culture. Conclusions about national culture as a constraint on organizational culture would be more compelling with such evidence.

Finally, from a conceptual point of view, Johns's (2006) conclusion that constraints such as national culture are a 'contextual imperative' which constrains internal management discretion stands in sharp contrast to frameworks in the strategy literature such as the resource based view (RBV) (Barney, 1986, 1991) and related human resources (HR) management perspectives (e.g., Barney & Wright, 1998) that organizational culture (together with related HR practices) is a factor that organizations can use to create value and to differentiate themselves.