Asia-Pacific Journal of Business AdministrationOrganizational culture profile of Malaysian high-tech industriesM Muzamil Naqshbandi Sharan Kaur Rashmi Sehgal Indra Devi Subramaniam

Article information:To cite this document:M Muzamil Naqshbandi Sharan Kaur Rashmi Sehgal Indra Devi Subramaniam ,(2015),"Organizational culture profile of Malaysian high-tech industries", Asia-Pacific Journal ofBusiness Administration, Vol. 7 Iss 1 pp. 2 - 19Permanent link to this document:http://dx.doi.org/10.1108/APJBA-08-2013-0088

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Organizational culture profile ofMalaysian high-tech industries

M. Muzamil Naqshbandi and Sharan KaurFaculty of Business and Accountancy, University of Malaya,

Kuala Lumpur, MalaysiaRashmi Sehgal

Faculty of Social Science and Humanities,National University of Malaysia (UKM), Bangi, Malaysia, and

Indra Devi SubramaniamGraduate School of Management, Multimedia University, Cyberjaya, Malaysia

AbstractPurpose – The role of organizational culture in determining success or failure of firms stands provenbeyond doubt in numerous studies. The purpose of this paper is to examine organizational culture ofthe Malaysian high-tech sector and highlights the organizational culture dimensions most and leastdominant in this sector. The study also examines differences with respect to organizational cultureacross the high-tech industries and different ownership types.Design/methodology/approach – Questionnaire survey method is used to collect the data frommiddle and top managers working in Malaysian high-tech industries.Findings – Five dimensions of organizational culture emerge in this study. Results indicate thatharmony and social responsibility are the most and least dominant dimensions of organizationalculture respectively. Significant differences are found in organizational culture across industries andownership types.Originality/value – While organizational culture seems to be a fairly well-researched topic inMalaysia, there seems to be a dearth of studies investigating the issue of culture prevalent in thehigh-tech industries in Malaysia; this despite the paramount contribution of the high-tech industries tothe Malaysian economy. This study identifies the culture of Malaysian high-tech industries, examineswhat cultural dimensions they focus on and do not, and compares organizational culture differencesacross industries and ownership structures.Keywords Malaysia, Organizational culture, High-tech industryPaper type Research paper

1. IntroductionNumerous studies in a wide array of contexts have established the importance oforganizational culture in determining success of a firm. With the world economybecoming increasingly global and many of the uncertainties facing the world revolvingaround culture (Fontaine and Richardson, 2003; Hofstede, 2009), organizationalculture has quite logically become one of the most popular concepts in managementand organizational theory (Ogbonna and Harris, 2000). Much of the literature onorganizational culture and firm performance suggests that culture can have asignificant effect on the economic value for a firm (Barney, 1986). Researchers(cf. Denison et al., 2003) go on to suggest that corporate culture may be one of the mostpowerful tools to be used to improve business performance. Hofstede (1980) suggestedthat, at a macro level, culture accounts for economic performance of various countries,while Schein (1990) stated that at a micro level organizational culture can helpunderstand the differences that may exist between successful firms operating in thesame national culture. Organizational culture thus plays an important role in helping

Asia-Pacific Journal of BusinessAdministrationVol. 7 No. 1, 2015pp. 2-19©EmeraldGroup Publishing Limited1757-4323DOI 10.1108/APJBA-08-2013-0088

Received 30 August 2013Revised 27 December 2013Accepted 3 February 2014

The current issue and full text archive of this journal is available on Emerald Insight at:www.emeraldinsight.com/1757-4323.htm

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organizations address several issues like those of external adaptation and integration(Pool, 2000), and other difficulties and challenges (Quick, 1992).

However, while many companies today recognize that culture can be used forcompetitive advantage, emphasis needs to be laid on the importance of havinga culture that fits with the demands of the company’s environment. A company’sperformance may benefit from culture to the extent that the shared values are properfor the company in question. Having a culture that encourages innovativeness andadaptability, for instance, will support the performance of a company in thehigh-tech industry. Therefore, having the “right” culture may be a competitiveadvantage for an organization while having the “wrong” culture may lead to poorperformance and organizational failure. Many high tech companies like Apple Inc.have been able to survive despite intense competition; such companies have venturedinto new and profitable markets by leveraging their culture of innovation towardproduct and internal process excellence.

In the Malaysian context, studies show that organizational culture influencesseveral facets of firms such as financial performance (Rashid et al., 2003; Yusoff, 2011),degree of integration and value creation in strategic alliances (Sambasivan and Yen,2010), attitudes towards organizational change (Rashid et al., 2004), innovation(Asmawi and Mohan, 2010) and many more (Wang and Abdul-Rahman, 2010;Yiing and Ahmad, 2009). While organizational culture seems to be a fairlywell-researched topic in Malaysia, there seems to be a dearth of studies investigatingthe issue of culture prevalent in the high-tech industries in Malaysia; this despitethe paramount contribution of the high-tech industries to the Malaysian economy.Motivated thus, this paper aims to:

(1) examine organizational culture in the Malaysian high-tech Industry;

(2) examine the differences between organizational culture among the fourhigh-tech industries that form the high-tech sector in Malaysia; and

(3) examine the differences in organizational culture under different ownershipstructure.

This paper contributes to the body of knowledge by enhancing our understanding ofwhat organizational culture dimensions are perceived as favorable by the high-techindustries in question. The data set for this study comes from Malaysia. Malaysia isone of the success stories of nations that has moved from a low to middle incomenation over the years through economic and social progress. Going forward,the Malaysian government aims to achieve a high-income nation status by 2020.To take the country to a high-income status, the economic machineries of the pasthave to be changed to accommodate a more aggressive environment thatincreasingly intensifies the competition for markets, capital and talent. As such,the government of Malaysia has drawn up a comprehensive effort called theEconomic Transformation Programme (ETP) that aims to transform Malaysia intoa high-income nation by 2020 (PEMANDU, 2011). Moreover, Malaysia is poised totransform to a major player in biotechnology, medical device manufacturing,semiconductors, solar power and value-added tech production (Area DevelopmentOnline). Malaysia has attracted renowned high-tech players like Intel, AICSemiconductor, BASF electronic Materials and others. In addition, Malaysia’shigh-tech parks have been set up that are conducive for high-tech industries tothrive. In view of this, we choose the Malaysian high-tech sector for this study.

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As Malaysia moves towards becoming a fully developed country, its economy willbecome more knowledge-based and technology-driven. There is therefore a need toidentify the dimensions of organizational culture that would be able to supporta knowledge- and technology-driven economy and enable it to compete with otherdeveloped countries.

The finding of this study, when contrasted and compared against what is knownabout the organizational culture of high-tech industries of the developed countries inthe region, will highlight whether Malaysian high-tech firms have organizationalculture similar to that of the high-tech industries in the region or is it unique in itself.In addition, to the best of researchers’ knowledge, this study is the first in theMalaysian context to validate the Organizational Culture Instrument developed byTsui et al. (2006) for the Chinese context. Doing this is interesting and makes sensebecause ethnic Chinese form around a quarter of Malaysia’s 28 million population whilemajority of the businesses are owned by them.

2. Organizational cultureCulture is a complex issue. It is an effective control mechanism dictating employeebehavior, thus making it a powerful way of controlling and managingemployee behaviors. The earliest significant formal writing on organizational culturecan be traced to Pettigrew (1979) who contended that people “create, shape, change andmanage the culture according to their beliefs, values, knowledge and needs.” SincePettigrew’s (1979) work on organizational culture, a large number of studies have piledup, defining and explaining the concept of organizational culture in different ways.Organizational culture has thus been defined differently by a multitude of scholars(Denison, 1990; Hofstede et al., 1990; Keesing, 1974; Ott, 1989; Schein, 1990, 1981).In this study, we consider an oft-cited definition of organizational culture given bySchein (1992) who defined organizational culture as: “a pattern of basic assumptionsthat the group learned as it solved its problems of external adaptation and internalintegration, that has worked well enough to be considered valid and, therefore, to betaught to new members as the correct way to perceive, think, and feel in relationto those problems.”

This definition focuses on external adaptation as well as internal integrationaspects of a firm’s culture. Using the same definition of organizational culture,Tsui et al. (2006) conducted an extensive study of state-owned, foreign-investedcompanies and private domestic firms in the Chinese context and identified fivecultural values namely: employee development, harmony, customer orientation,social responsibility and innovation. Based on scores for these culture valuesobtained in their study and comparing with “existing models,” the authors identifiedfour configurations of culture profiles: Highly Integrative Culture, Market-OrientedCulture, Moderately Integrative Culture and Hierarchy Culture. The five culturevalues identified in this study relate to both internal integration and externaladaptation functions of the firms. A firm with a Highly Integrative Culturepays equally high attention to employee development and harmony (facilitatingthereby internal integration) and customer orientation, social responsibility andinnovation (facilitating external adaptation). Consistent with Schein (1992),according to this model firms emphasizing dimensions that contribute to thesetwo functions (internal integrations and external adaptability) are more effectivein terms of managers’ perception of firm performance, organizational supportand commitment to the firm.

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Dimensions of organizational cultureOrganizational culture has been evaluated along many dimensions and this hasresulted in models and theories which are conceptually different but fundamentallysimilar (Yiing and Ahmad, 2009). Several typologies have thus been developed tounderstand the concept of organizational culture. In the Malaysian context, researchershave used several typologies/dimensions of organizational culture. For instance,Rashid, et al. (2004) used Goffee and Jones’ (1998) framework, Yiing and Ahmad (2009)used Wallach’s (1983) typology, while Abdullah (1992) used the famous typology byHofstede (1980), Sambasivan and Yen (2010) used Organizational Culture AssessmentInstrument (OCAI) developed by Quinn and Rohrbaugh (1983) while the instrumentused by Asmawi and Mohan (2010) was adapted from Dennison OrganizationalCulture Survey (Denison and Neale, 1996) and Innovation Mini Audit (Wycoff andHattori, 2004).

As mentioned before, this study uses the definition of organizational culture asgiven by Schein (1992) and uses the dimensions and measurements of organizationalculture, based on this definition, developed by Tsui et al. (2006). Several reasons existfor choosing the dimensions and measurements given by Tsui et al. (2006).

First, high-tech industries function in an environment characterized by threetypes of uncertainty: market uncertainty, technology uncertainty, and competitivevolatility. An organizational culture which supports employee development,harmony, customer orientation, social responsibility and innovation would berequired to develop the needed competencies, attitudes and work behavior amongthe employees. Schein (1992) recognized organizational diversity according to theoccupational profiles of workers. Thus organizational culture that would contributeto positive organization outcomes must have dimensions that would support thecore business of the organization. This suggests that the typology used tomeasure the organizational culture should be able to capture industry-relatedorganizational culture.

Second, the framework by Tsui et al. (2006) is quite recent as compared to other oldermodels found in literature and this framework captures cultural values that lead toboth internal integration and external adaptability. It is apparent that organizationsthat score high on all dimensions of culture in Tsui et al.’s (2006) instrument wouldhave integrative culture and those that score low would have hierarchical culture. Inthis way, culture of organizations can be described on a continuum from integrativeto hierarchical.

Third, the description of Malaysian national culture and its implications suggestthat there is compatibility between it and organizational culture typology of Tsuiet al. (2006). Malaysian society being collectivist would emphasize building skills,becoming masters of something, work for intrinsic rewards, value harmony andconcern for community. These characteristics would support employee development,customer orientation, harmony and social responsibility. Being low on uncertaintyavoidance, Malaysians are characterized by change and risk taking, both of which arenecessary for innovation, another dimension of organizational culture proposedby Tsui et al. (2006). Therefore this makes the case for selecting the Tsui et al.(2006) typology of organizational culture for measuring the culture of high-tech sectorin Malaysia.

In addition to these factors, Tsui et al. (2006) developed the cultural dimensionsscale, based on the seminal work of Schein (1992), using both a qualitative and aquantitative approach. A two-phase design helps to ensure methodological rigor and

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capitalizes on the unique strengths of the two traditionally separate researchorientations (Lee, 1999). Lastly, to our best knowledge, there is no study done in theMalaysian context using Tsui et al.’s (2006) framework. Therefore, besides helpinganswer the explicit objectives of this study, this research exercise will as well validateTsui et al.’s (2006) instrument in the Malaysian business context.

Integrative and hierarchical organizational culturesOrganizational cultures have a boundary defining role, with different organizationshaving different cultures that are reflected in different structures and systems(Handy, 1976). Two terms are widely used to describe organizational culture:integrative and hierarchical. Integrative culture is used to refer to organizations thathave widely shared and strongly held values that address the firm’s needs of internalintegration and external adaptation (Schein, 1992). Hierarchical culture is used to referto organizations with a low level of emphasis on these values (Cameron and Freeman,1991). Hierarchical culture organizations achieve goals through formal rules and closesupervision rather than through shared values.

Integrative culture organizations emphasize the values of caring for employees,customers, and the society. They emphasize high standards for performance,innovation and responsiveness to changes in the external environment (O’Reilly et al.,1991; Tsui et al., 2006). Research by Kerr and Slocum (1987) and Sheridan (1992) hasshown that organizations that respect its members, value teamwork and security areable to foster commitment and loyalty among employees. According to Denison andMishra (1995) organizations that care for their customers and are socially responsibletend to be more flexible in dealing with changes in the environment and directingemployees toward fulfilling their objectives. Integrative culture organizations uniteemployees by promoting their aspirations to succeed, instilling a purpose forwork, and strengthening their involvement with the organization (Chatman andJehn, 1994). Employees’ interests are synergized in integrative cultures throughemphasis on trust, long-term support, and investment in employees which arecharacteristic of social exchange relationship. Delayed gratification is acceptedbecause the employees trust the organization, and are willing to transcendself-interest in favor of pursuing common goals. Employees in integrative cultureorganizations reciprocate with high levels of affective commitment, task performance,and citizenship behaviors.

Hierarchical culture on the other hand does not emphasize such cultural valueswhen dealing with customers and society (Cameron and Freeman, 1991). There isvery little participation in decision making and employees are expected to followstandard operating procedures and rules. Hierarchical culture tends to neglectemployees’ psychological needs. Therefore in hierarchical culture organizations,employees’ identification with and psychological attachment to the organization areweak. They tend to be utilitarian in their involvement with the organization. Employeeshave a negative perception of their organization in terms of trust, respect andinvestment. They also do not expect repayment from the organization for their supportand trust. The employees in hierarchical organizations tend to be calculative and wouldnegotiate with their employer for rewards. They would want immediate gratificationfor their services rendered and pursue self-interest without caring about collectivegoals. In these circumstances, the employees are psychologically detached from theorganization. They are unwilling to contribute much beyond basic task performanceand exhibit low organizational citizenship behavior.

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Organizational culture and industry typeAccording to Chatman (1991) organizational culture could vary across firms evenamong firms operating in homogenous industries. Pennings and Gresov (1986) add thatorganizations have clear differences in culture based on industry norms. Thereforefeatures present in the industry an organization operates in, such as the technologyused and the rate of growth, may also affect the uniqueness of an organization’sculture. In this backdrop, in this study we expect industry characteristics to have aneffect on organizational culture. Barney (1986) says that for organizational culture to bea source of competitive advantage, it must be valuable, rare and not imitable. Thereforeit is important to study the unique organizational culture that can give competitiveadvantage to firms in a particular industry and to determine whether it differs acrossfirms in the same industry.

Organizational culture and firm ownershipSince cultures are kept alive through selection, socialization and actions of topmanagement, we would expect the organizational culture of the surveyed companies tobe influenced by the founders or owners who in this case are mainly of Chinese ethnicorigin. We would then expect the result of this study to mirror that of Tsui et al. (2006)who studied Chinese employees in companies in China. Many studies have shown thatorganizational culture is influenced by the dominant national and societal culture of thephysical location in which the company is operating (Beruvides, 2001; Enz, 1986).Hofstede (1980) explained this phenomenon in his study on the Dimensions of NationalCulture. From this perspective, it would be interesting to find out whether the uniqueMalaysian national culture created by the multiracial society of which the MalaysianChinese are a part, has any influence on the organizational culture of the companies.

3. MethodologyResearch designA cross-section field survey method was used to conduct this study.

Population and samplingThe target population of this study were the middle and top managers working in theMalaysian manufacturing firms operating in the four industries classified by OECD(1997) as high-tech: Aerospace, Computers and office machinery, Electronics andcommunication and Pharmaceuticals. Two sample frames were used: the first onewas taken from Malaysian Manufacturers’ Directory (2011) for Computers andOffice Machinery, Electronics and Communication and Pharmaceuticals industries. AsAerospace firms were not indexed in the Malaysian Manufacturers’ Directory (2011),the second sampling frame was retrieved from the Aerospace Industry Report (AIR)Online Database which is run by the Malaysian Aerospace Council (MAC). In total,900 questionnaires were distributed by email and in person; 366 were returned. Afterdata coding and entry, 27 responses were found to have more than 10 percent missingvalues or outliers and were therefore discarded (Hair et al., 2010). Finally 339 useableresponses were used for data analysis. This represents a response rate of 37.70 percent.

Measures, reliability and pilot-testThe research instrument was a structured questionnaire. Measures for organizationalculture were adapted from Tsui et al. (2006). Using 23 items, the scale by Tsui et al. (2006)

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measures organizational culture on five dimensions: employee development (five items),harmony (five items), customer orientation (five items), social responsibility (four items)and innovation (four items). To reduce common method bias (CMB) and common methodvariance (CMV), four marker variables were inserted and the items were jumbled up(Conway and Lance, 2010). All the items were anchored on a five-point Likert scaleranging from “strongly disagree” to “strongly agree”. To ensure reliability of the scale, apilot test was conducted using Masters students with previous work experience.Questionnaires were distributed among students from three faculties of the University ofMalaya namely: Faculty of Computer Sciences, Faculty of Engineering and Faculty ofBusiness and Accountancy. Constraints were applied and only the post-graduatestudents with previous work experience were targeted. From the Faculty of Business andAccountancy, only the MBA students were administered the questionnaire. Most of theseMBA students were studying part-time and working full-time at several managementpositions. MBA students have been used successfully for pretests for firm level researchin many studies (cf. Atuahene-Gima andMurray, 2004; Frels et al., 2003). Frels et al. (2003)followed a similar path and subjected their initial questionnaire to IT professionalsenrolled in an executive education class to improve reliability of their instrument.Cronbach’s α was used to measure the internal consistency and it was found to be 0.711,thus confirming acceptable reliability of the scale (Hair et al., 2010).

4. Data analysisProfile of the respondentsRoughly a proportional number of responses were collected from all the four industriessurveyed. Most of the respondents (54.9 percent) occupied top management positionswhile 45.1 percent were middle managers, indicating that they were in a good position toperceive and describe the emphasis of their company values relating to internalintegration and external adaptation of their firms (Tsui et al., 2006). All the respondentshad served their “current” firms for more than five years and thus are expected to befamiliar with the culture of their organization quite well. The firms served in the local,regional and global markets with most of the firms (42.2 percent) serving the globalmarket. An overwhelming majority (93.5 percent) of the firms had been operating formore than ten years and thus can be considered quite established. Around 85 percentof the firms had more than 100 employees while around 84 percent earned revenue ofmore than $300,000 (a million Ringgit Malaysia (RM)). All these statistics indicatethat all the four surveyed industries are well represented and that the respondentswere qualified enough to respond to the questions about the organizational cultureof their firms which, judging by the firm age, revenue and number of employees,were quite established. These descriptive statistics of the demographic variables arepresented below in Table I.

Exploratory factor analysisTo gain a better understanding of the underlying structure of the data (Pitt andJeantrout, 1994) and prepare ground for answering the objectives of this study, weconducted exploratory factor analysis (EFA) using principal component analysis as theextraction method and varimax with Kaiser normalization as the rotation method toreduce the 23 items measuring organizational culture into a smaller number of factors.Appropriateness of factor analysis was determined by examining the Kaiser-Meyer-Olkin(KMO) measure of sampling adequacy (0.897) and the Bartlett’s test of sphericity (sig at0.000). Both tests indicate suitability of performing factor analysis. As shown in Table II,

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consistent with the number of factors extracted in Tsui et al.’s (2006) study, five underlyingfactors emerged in this study. The five factors explain 62.93 percent variance with Eigenvalue being greater than 1. The factors are labeled: employee development, harmony,customer orientation, social responsibility and innovation. However, four items out of the

Categories n % Cumulative (%)

Type of industryAerospace 73 21.5 21.5Computers and Office Machinery 87 25.7 47.2Electronics and Communication 76 22.4 69.6Pharmaceuticals 103 30.4 100

Respondent positionMiddle Management 153 45.1 45.1Top Management 186 54.9 100

Respondent years in firm5-10 years 217 64.0 64.011-15 years 95 28.0 9.016-20 years 24 7.1 99.1Above 20 years 03 0.9 100

Firm’s marketLocal/National 88 26.0 26.0Regional 108 31.9 57.8Global 143 42.2 100

Firm ownershipPublicly owned 26 7.7 7.7Privately owned 161 47.5 55.2State owned 16 4.7 59.9Foreign ownership 110 32.4 92.3Mixed ownership/ Joint venture 26 7.7 100.0

Company age1-10 years 22 6.5 6.511-20 years 153 45.1 51.621-30 years 87 25.7 77.331-40 years 72 21.2 98.5Above 50 years 05 1.5 100.0

Number of employeesLess than 100 52 15.3 15.3101-500 137 40.4 55.8501-1,000 121 35.7 91.41,001-5,000 26 7.7 99.1Above 5,000 03 0.9 100

Annual revenue (RM)Less than 200,000 6 1.8 1.8200,000-500,000 13 3.8 5.6500,000-1 mil 35 10.3 15.91 mil-5 mil 66 19.5 35.45 mil-10 mil 24 7.1 42.510 mil-25 mil 138 40.7 83.225 mil-above 57 16.8 100.0

Table I.Showing

characteristicsof the sample

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total 23 items had poor factor loadings. These four items, one each from employeedevelopment, harmony, customer orientation and social responsibility, were removed fromfurther analysis.

Confirmatory factor analysisGuided by the results of EFA and to confirm the above results, we conduct aconfirmatory factor analysis (CFA) by specifying a measurement model. In line withHair et al. (2010, p. 644), model fit was assessed using χ2 values and degrees offreedom, the CFI and the RMSEA. The initial model fit for the measurement modelincluding all the 23 items of organizational culture showed unreasonable fit: CMIN/DF¼ 2.910; CFI¼ 0.888; RMSEA¼ 0.075. Therefore the model was modified and fouritems namely OC.EmpDev.1, OC.Harmony.1, OC.CustOrient.4 and OC.SocRes.1 weredropped. As Table III below shows, after removing these items from the measurementmodel, the new model fitted the data better: CMIN/DF¼ 2.571; CFI¼ 0.931;RMSEA¼ 0.068.

Organizational culture dimensionsThe first objective of this study is to examine organizational culture in generalin Malaysian high-tech industries. Thus the dimensions and the extent to which theyare focused by the Malaysian high-tech sector were examined. This was done by

Communalities FactorsItems Extraction 1 2 3 4 5

OC.EmpDev.1 0.461 0.362OC.EmpDev.2 0.646 0.586OC.EmpDev.3 0.722 0.715OC.EmpDev.4 0.720 0.743OC.EmpDev.5 0.623 0.754OC.Harmony.1 0.294 0.483OC.Harmony.2 0.653 0.703OC.Harmony.3 0.678 0.737OC.Harmony.4 0.581 0.670OC.Harmony.5 0.597 0.640OC.CustOrient.1 0.632 0.698OC.CustOrient.2 0.648 0.752OC.CustOrient.3 0.636 0.750OC.CustOrient.4 0.564 0.414OC.CustOrient.5 0.596 0.692OC.SocRes.1 0.469 0.481OC.SocRes.2 0.626 0.776OC.SocRes.3 0.841 0.851OC.SocRes.4 0.756 0.722OC.Innov.1 0.658 0.693OC.Innov.2 0.722 0.787OC.Innov.3 0.738 0.827OC.Innov.4 0.613 0.730% of variance 14.69 14.02 11.97 11.48 10.76Eigen value 8.50 1.82 1.58 1.51 1.07Notes: Total variance extracted by five factors¼ 62.93 percent; extraction method, principalcomponent analysis; rotation method, varimax with Kaiser normalization

Table II.EFA oforganizationalculture

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calculating means for all the dimensions of organizational culture. Table IV andFigure 1 below show that maintaining Harmony scores as the most dominant culturaldimension in Malaysian high-tech organizations. employee development comes secondfollowed by innovation, customer orientation and social responsibility. These areinteresting results and are discussed in a later section.

Organization culture dimensions and industry typeA part of the first objective of this study is to examine the industry differences withrespect to organizational culture in general. To answer this objective, we conduct aone-way ANOVA test to test for any significant differences between the four high-techindustries with respect to organizational culture. A composite variable fororganizational culture is calculated by averaging the 19 items that had acceptablefactor loading in the EFA and CFA. A significant effect of industry type onorganizational culture at po0.01 level was found (F(3, 335)¼ 17.43, p¼ 0.00). Since

Construct Dimension Items Initial model fit Final model fit

Organizationalculture

Employeedevelopment

OC.EmpDev.1a CMIN/DF¼ 2.910

CMIN/DF¼ 2.571OC.EmpDev.2

CFI¼ 0.888 CFI¼ 0.931OC.EmpDev.3RMSEA¼ 0.075 RMSEA¼ 0.068OC.EmpDev.4

OC.EmpDev.5Harmony OC.Harmony.1a

OC.Harmony.2OC.Harmony.3OC.Harmony.4OC.Harmony.5

Customer orientation OC.CustOrient.1OC.CustOrient.2OC.CustOrient.3OC.CustOrient.4a

OC.CustOrient.5Social responsibility OC.SocRes.1a

OC.SocRes.2OC.SocRes.3OC.SocRes.4

Innovation OC.Innov.1OC.Innov.2OC.Innov.3OC.Innov.4

Note: aIndicates the items deleted from the final model

Table III.Initial and final

model fit fororganizational

culture

Dimension n Mean Rank SD

Employee development 339 4.29 2 0.61Harmony 339 4.33 1 0.60Customer orientation 339 4.21 4 0.52Social responsibility 339 4.18 5 0.72Innovation 339 4.27 3 0.67

Table IV.Mean scores fororganizational

culture dimensions

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significant results were found for organizational culture with respect to industry type,post hoc comparisons are necessitated (Table V).

Post-hoc comparisons using the Tukey HSD test indicated that at po0.01 level themean score for the Aerospace industry (M¼ 4.09, SD¼ 0.35) was significantly differentfrom the Computer and Office Machinery industry (M¼ 4.53, SD¼ 0.34) andPharmaceutical industry (M¼ 4.25, SD¼ 0.47). Besides the mean score for Computerand Office Machinery industry was significantly different from that of Electronics andCommunication industry (M¼ 4.12, SD¼ 0.55) while the mean score for thePharmaceuticals industry was significantly different from that of Computer andOffice Machinery industry. Taken together, these results suggest that industry typedoes have a significant effect on organizational culture. In other words, our resultssuggest that the Computers and office machinery industry focuses most on all thedimensions of organizational culture followed by Pharmaceuticals, Electronics andcommunications and Aerospace industries.

Cluster analysisTo make further sense of organizational culture of high-tech firms in Malaysia, weperform cluster analysis on the five dimensions of organizational culture obtained inEFA and confirmed in CFA. This will help in extracting easier-to-understandconclusions about the data. Hence cluster analysis is performed using the K-meansprocedure on the five dimensions of organizational culture. Results of three-cluster,four-cluster and five-cluster solutions were compared and examined. A three-clustersolution was found to be most interpretable. This three-cluster solution was also veryclose to the past studies including the one by Tsui et al. (2006). The first cluster hadhigh value on all the five dimensions of organizational culture (i.e. both internalintegration and external adaptation). This cluster, in line with past studies, was named

Type of Industry n Mean SD F value (overall) Significance (overall)

Aerospace 73 4.09 0.35 17.43 0.00*Computers 87 4.53 0.34Electronics 76 4.12 0.55Pharmaceuticals 103 4.25 0.47Note: *Significant at p¼ 0.01

Table V.Overall results ofANOVA

4.35

4.3

4.2

4.15

4.1Employee

DevelopmentHarmony Customer

OrientationSocial

ResponsibilityInnovation

4.25

Most and least focused Organizational Culture dimensions

Figure 1.Most and leastfocusedorganizationalculture dimensionsin Malaysianhigh-tech sector

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Highly Integrative Culture to describe firms’ high focus on both internal integrationand external adaptation. The second cluster, with good score on all dimensions (but lessthan it was in case of Highly Integrative Culture) was named Moderately IntegrativeCulture. The third cluster, with low score on all the five dimensions of organizationalculture was named Hierarchy Culture, again deriving the phrase from past studies. Ascan be seen in Table VI below, the three culture types classify the surveyed firms in thisstudy into three categories: those with Highly Integrative Culture (169 firms; 49.85percent), Moderately Integrative Culture (121 firms; 35.70 percent) and HierarchyCulture (49 firms; 14.45 percent).

Organizational culture type and industry typeThe second objective of this study is to examine the differences with respect toorganizational culture in firms operating in the four Malaysian high-tech industries.Therefore we performed a χ2 test to examine these differences. Statistically significantdifferences were found in the organizational culture of the four industries surveyed, χ2(6, n¼ 339)¼ 49.59 po0.01. The Computer and Office Machinery industry, theElectronics and Communications industry, and the Pharmaceuticals industry weremore likely to have Highly Integrative Culture, while the Aerospace industry was morelikely to have Moderately Integrative Culture.

In the Aerospace industry, 60.3 percent of the firms had Moderately IntegrativeCulture while 30.1 and 9.6 percent had Highly Integrative Culture and HierarchyCulture respectively. As opposed to the Aerospace industry, in the Computers andOffice Machinery industry 70.1 percent of the firms had Highly Integrative Culturewhile 26.4 and 3.4 percent had Moderately Integrative Culture and HierarchyCulture. Somewhat similar to this, in the Electronics and Communications industry 43.4percent of the firms had Highly Integrative Culture while 27.6 and 28.9 percent of thefirms had Moderately Integrative Culture and Hierarchy Culture respectively. Lastlyand quite similar to the Computers and Office Machinery industry and Electronicsand Communications industry, in the Pharmaceuticals industry 51.5 percent of thefirms had Highly Integrative Culture while 32 and 16.5 percent had ModeratelyIntegrative Culture and Hierarchy Culture respectively.

Organization culture type and firm ownership typeTo answer the third objective of this paper, that is to examine whether any differencesexist with respect to organizational culture under different ownership types, we performeda χ2 test. The relation between organizational culture and ownership types was found tobe significant, χ2 (8, n¼ 339)¼ 29.53 po0.01. The privately owned firms, those that hadforeign ownership, and the firms with mixed ownership were more likely to have highlyintegrative culture, while the publicly owned and the state-owned firms were more likelyto have moderately integrative culture. These results are presented in Table VI above.

Among the privately owned firms, 58.4 percent were found to have HighlyIntegrative Culture, while 29.8 and 11.8 percent had Moderately Integrative Culture andHierarchy Culture respectively. As against this, most of the publically owned firms(61.5 percent) had Moderately Integrative Culture while 26.9 and 11.5 percent hadHierarchy Culture and Highly Integrative Culture respectively. Most of the state-ownedfirms (37.5 percent) had Moderately Integrative Culture, while 31.2 percent had HighlyIntegrative Culture and 31.2 percent had Hierarchy Culture. In addition, most of thefirms with foreign ownership (51.8 percent) had Highly Integrative Culture while 38.2

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Highlyintegrativecultu

reModeratelyintegrativecultu

reHierarchy

cultu

reMean

SDn

Mean

SDn

Mean

SDn

F-test

Organ

izationa

lculture

dimensions

Employee

developm

ent

4.72

0.37

169

3.94

0.43

121

3.68

0.59

49168.39*

Harmony

4.75

0.34

169

4.03

0.43

121

3.63

0.60

49196.96*

Custom

erorientation

4.47

0.36

169

4.06

0.50

121

3.70

0.54

4970.02*

Social

responsibility

4.55

0.46

169

4.18

0.41

121

2.90

0.56

49220.64*

Innovatio

n4.75

0.35

169

3.89

0.56

121

3.58

0.51

49209.85*

Firm

ownership

n%

n%

n%

Total

Publically

owned

311.5

1661.5

726.9

26Privatelyow

ned

9458.4

4829.8

1911.8

161

Stateow

ned

531.2

637.5

531.2

16Fo

reignow

nership

5751.8

4238.2

1110

110

Mixed

ownership/JV

1038.5

934.6

726.9

26Indu

stry

type

n%

n%

n%

Total

Aerospace

2230.1

4460.3

7.0

9.6

73Co

mpu

ters

andofficemachinery

6170.1

2326.4

3.0

3.4

87Electronics

andcommun

ications

3343.4

2127.6

2228.9

76Ph

armaceuticals

5351.5

3332.0

1716.5

103

Total

169

49.85

121

35.7

4914.45

339

Note:

*po

0.01

Table VI.Organizationalculture dimensionsunder differentorganizationalculture types

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percent had Moderately Integrative Culture and only 10 percent had Hierarchy Culture.Most of the firms with mixed ownership (38.5 percent) had Highly IntegrativeCulture while 34.6 percent had Moderately Integrative Culture and 26.9 percent hadHierarchy Culture.

5. Discussion and conclusionsThis paper set out to achieve three objectives. The first objective was to examinethe cultural orientation of firms operating in four high-tech industries in Malaysia.To achieve this objective, the instrument developed by Tsui et al. (2006) for theChinese context was used for the first time in Malaysia. It emerged that organizationalculture in Malaysian firms operating in the high-tech industry has five dimensions:employee development, harmony, customer orientation, social responsibility,innovation. This shows that the organization culture dimensions in Malaysianhigh-tech industry, measured using the instrument developed originally for the Chinesecontext by Tsui et al. (2006), emerge the same way as for organizations in China. Thismay be due to the cultural closeness of Malaysia with China and the historicalexchanges between the two countries; in addition to the fact that quite a significantnumber of businesses in Malaysia are run and owned by ethnic Chinese.

In this study we found Harmony to be the most prevalent dimension oforganizational culture in Malaysian high-tech industries while social responsibility wasthe least focused one. Harmony being the most prevalent dimension of organizationalculture is understandable and can be attributed to what has been called the“Asian-ness” of the Malaysian national culture. Chiok et al. (2012) highlight harmonyas a part of Malaysian culture suggesting that the young Malaysians are optimisticabout the emerging Malaysian culture and are adapting well to the cultural elementsof other ethnic groups despite some differences in opinion. Being a multi-racial country,the three major ethnic groups in Malaysia interact, deal and do business with eachother on a daily basis. Promotion of a harmonious culture in such a situation istherefore not only looked upon favorably but promoted as well. This becomes evidentby looking at the current Malaysian National Culture Policy, 1Malaysia, which aimsto foster harmony and unity among all the Malaysians irrespective of their racialbackground (1Malaysia.com).

Moreover, in this study three culture types emerged: highly integrative culture,moderately integrative culture and hierarchy culture. Indicating a positive trend,most of the Malaysian firms were found to have highly integrative culture while only asmall number had hierarchy culture. While having a highly integrative culture canbe a panacea for the many issues facing businesses today – more so in the highlydynamic high-tech industry – it is encouraging to see the Malaysian high-tech firms toeither have highly integrative culture or moderately integrative culture. However quitea few firms (28.9 percent) in the electronics and communications industry were found tohave hierarchy culture. This points towards the areas of improvement whereby thefirms must make an effort to change their organizational culture and make it moreintegrative to respond better to the dynamic market trends and needs.

This study also examined the differences between organizational culture amongfour high-tech industries in Malaysia. Significant differences were found with highlyintegrative culture being predominant in the computer and office machinery industry,electronics and communication industry and the pharmaceuticals industry whilemoderately integrative culture was found to be predominant in the aerospace industry.This has implications for the aerospace industry in that this industry in Malaysia

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should make efforts to modify its organizational culture to become more integrative.Organizational culture plays a critical role as it is a critical means for firms to integrateinternal processes and to adapt to the external environment (Denison and Mishra,1995). The firms with integrative cultures widely share and strongly hold values thataddress the firm’s needs of internal integration and external adaptation, therebyenhancing firm performance. Besides on a positive note, hierarchy culture – which laysa low level of emphasis on the values of internal integration and eternal adaptation(Cameron and Freeman, 1991) – was not found to be predominant in any of the fourhigh-tech industries surveyed for this study.

We also examined the differences in organizational culture under differentownership structures. Again significant differences were found; with the privatelyowned firms, those with foreign ownership, and the firms with mixed ownership morelikely to have highly integrative culture while the publicly owned and the state-ownedfirms were more likely to have moderately integrative culture. While hierarchy culturewas not found to be predominant under any ownership structure, 31.2 percent of thestate-owned firms and 26.9 percent of the publicly owned firms and 26.9 percent of thefirms with mixed ownership were found to have hierarchy culture. It is encouragingagain to know that predominantly firms under all the ownership structures either havehighly integrative culture or moderately integrative culture. This finding however alsopoints towards the scope, particularly for the publicly owned, the state-owned andthe mixed ownership firms to adopt a highly integrative culture. This can be wellexpected to boost their performance and help them compete with their counterpartsoperating under other ownership structures (Gordon, 1985).

6. LimitationsMalaysia is not a homogeneous country (Lim, 2001). The Malaysian population is madeof three major ethnic groups: Malays, Chinese and Indians. According to Fontaine andRichardson (2003) each ethnic group in Malaysia tries to cooperate and compete witheach other for economic, social and political reasons. In this study, we did not examinethe differences between ethnicities with respect to organizational culture. Doing socould have helped in understanding if cultural differences exist between Malaysianorganizations run and owned by different races. Furthermore, the employees of thesurveyed firms also come from the three major ethnic groups in Malaysia. By ignoringthis factor, there is a possibility that the richness of the relationships within ethnicgroups has been ignored (Asma, 2001). This limitation is however mitigated as Asmaand Lim (2001) reported that the three ethnicities in Malaysia differed significantly ononly one construct that is religiosity. From there stems another limitation of this study,that is not taking into consideration the dimensions of religion which is quite importantin the Malaysian workplace (Asma and Lim, 2001). In addition, it must be noted thatthere are low numbers of firms in some firm ownership types such as publically owned(26), state-owned (16) and mixed-ownership (26). Hence the results of this study need tobe interpreted with caution.

7. Future researchThis study examined organizational culture in Malaysian high-tech sector using theinstrument developed by Tsui et al. (2006). First, future research can look at this sectorby using other instruments. Second, the factor of ethnicity should be incorporated infuture studies. Third, future research can consider the religiosity dimension of culturein the Malaysian workplace.

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Further reading1Malaysia.com, available at: www.1malaysia.com.my (accessed March 1, 2013).

About the authorsDr M. Muzamil Naqshbandi is a Post-Doctoral Research Fellow in the Faculty of Business andAccountancy, the University of Malaya. His research interests are organizational culture, openinnovation, business strategy and research methods. He has published his work in manyinternational journals. Dr M. Muzamil Naqshbandi is the corresponding author and can becontacted at: virkul@gmail.com

Dr Sharan Kaur is Deputy Dean (Research) in the Faculty of Business and Accountancy, theUniversity of Malaya. She has published her work in many national and international journals.Her current work revolves around business strategy and open innovation.

Rashmi Sehgal is a Doctoral Student at the National University of Malaysia (UKM). She haspublished her work in many national and international journals and newspapers. Her latestresearch appeared in Asian Social Science.

Dr Indra Devi Subramaniam is a Senior Lecturer in the Faculty of Management in theMultimedia University, Cyberjaya, Malaysia. Her research concerns organizational culture.

For instructions on how to order reprints of this article, please visit our website:www.emeraldgrouppublishing.com/licensing/reprints.htmOr contact us for further details: permissions@emeraldinsight.com

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