Cultural and Economic Determinants of Managerial Perceptions of Quality

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Cultural and Economic Determinants of ManagerialPerceptions of QualityBurhan F. Yavas a & Kazim Konyar ba School of Business and Public Administration, California State University , Dominguez Hills,Carson, CA, 90747 E-mail:b Department of Economics , California State University San Bernardino , San Bernardino,CA, 92407 E-mail:Published online: 11 Oct 2008.

To cite this article: Burhan F. Yavas & Kazim Konyar (2003) Cultural and Economic Determinants of Managerial Perceptions ofQuality, Journal of Asia-Pacific Business, 4:4, 3-23, DOI: 10.1300/J098v04n04_02

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Cultural and Economic Determinantsof Managerial Perceptions of Quality

Burhan F. YavasKazim Konyar

ABSTRACT. The study investigates the impact of societal-level factorsand organizational attributes on managerial perceptions of quality. Theresults are based on a cross-national study of managerial perceptions ofquality utilizing data from the United States, Japan, Taiwan, Hong Kong,Singapore, and Turkey. The study draws on Cheng (1994) by includingthe societal context into the analysis of organizations. It has been shownthat the application of such an inclusive approach improves cross-na-tional research by focusing on society-level variables in addition to theorganizational-level variables. Models’ coefficients are estimated usingan Ordered Logit estimation method. The findings suggest that culturalfactors are significant predictors of overall perceptions towards qualityexhibited by managers. Specifically, the results indicate that managersfrom cultures with high levels of individualism and hierarchy tend toperceive quality processes differently than do their counterparts in othercultures. Article copies available for a fee from The Haworth Document Deliv-ery Service: 1-800-HAWORTH. E-mail address: <[email protected]> Website: <http://www.HaworthPress.com> © 2002 by The Haworth Press,Inc. All rights reserved.]

KEYWORDS. Cross-national study, quality perceptions, survey, culture

Burhan F. Yavas is Professor, School of Business and Public Administration, Cali-fornia State University, Dominguez Hills, Carson, CA 90747 (E-mail: [email protected]).

Kazim Konyar is Associate Professor, Department of Economics, California StateUniversity San Bernardino, San Bernardino, CA 92407 (E-mail: [email protected]).

Journal of Asia-Pacific Business, Vol. 4(4) 2002http://www.haworthpress.com/store/product.asp?sku=J098

2002 by The Haworth Press, Inc. All rights reserved.10.1300/J098v04n04_02 3

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INTRODUCTION

In much of the recent management literature, quality management isviewed as a key factor in a company’s ability to compete and in itslong-term opportunity for success. Terms such as “Total Quality Man-agement,” “World Class Manufacturing,” and “Quality is Job One” arenow commonly used as more and more firms have increasingly em-braced quality as a management concept. Several studies suggest thatcompanies with strong emphasis on quality as a strategic vehicle tend tooutperform those operating without such emphasis (Benson, 1993;Hayes and Clark, 1985). For example, strong commitment to quality isidentified as one of the main reasons for the “Japanese miracle” cited byNaisbitt (1982) and Kennedy (1987). Other studies have attributed Jap-anese manufacturers’ success to their ability to convert focus on qualityinto a competitive advantage (Garvin, 1988; Reitsperger and Daniel,1990, Pfau, 1989; Yavas, 1995a and 1995b).

Most of the tools and techniques used in the current quality manage-ment practices were originally developed in the U.S. It was the Japa-nese, however, who excelled in implementing them (Easton, 1993).Some argue that implementation of quality programs was made easierin Japan because of Japanese “process-oriented” management–in whichthe focus is on the organizational processes, not on individuals. Thistype of management may be seen as opposed to the “results-oriented”U.S. style of management, in which the main focus is on the individualand the end-product (Easton, 1993). Recently, the concept of qualityhas taken on a broader meaning. It now also encompasses the notion ofcustomer satisfaction. Consequently, “quality” production requires man-agerial involvement at all levels. Other supporting elements of qualityinclude leadership, education and training, supportive structure, com-munication, reward and recognition, and measurement (Yavas and Bur-rows, 1994).

QUALITY AND CULTURE

A resource-based view of the firm emphasizes a firm’s capabilitiesand its resources that are unique, valuable, and difficult to imitate(Grant, 1998), all of which give rise to sustainable competitive advan-tages. Utilizing these unique resources, a firm is better able to positionitself in markets to generate above normal rates of return. A firm’s orga-

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nizational culture may also be viewed as a factor contributing to its suc-cess. Boyacigiller et al. (1996) and other researchers have suggested theinfluence that national culture has on company performance. A study byKotter and Hessket (1992) shows a long-term, positive relationshipbetween strong company culture and economic performance. Li et al.(2001) argue that the national culture, since it heavily influences organi-zational culture, may be considered as part of a firm’s resources in gen-erating a competitive advantage.

Dunning and Bansal (1997) point out that in some countries, greateremployee commitment that may be based on the nation’s cultural val-ues helps create specialized assets and skills, which in turn enhancefirms’ competitive advantages. As an example, many collectivist cul-tures may have advantage in establishing relations among competitorsand suppliers and joint venture partners, while advantage in technologi-cal assets may be associated with individualistic cultures, such as that ofthe United States. “Quality Management,” spearheaded by Deming(1986), Ishikawa (1985) and Juran (1974), generally assumes that em-ployees are committed to continuous improvement and will take initia-tives to improve if given the means to do so (Kekale, 1998). Flyn et al.(1995) show that the two widely accepted management practices ofcore management practices (such as statistical process control) and in-frastructure practices (such as top management support, commitment,and education) produced better results in organizations in which loyaltyand pride in work were supported. In this regard, the involvement of topmanagement in creating the structure and systems to convey the impor-tance of producing quality goods and services can be seen as critical infirms’ successes. It is also clear that employees in firms with involvedtop management are more likely to engage in behaviors that are per-ceived to be supported by the management. However, paradoxically,only a few studies have examined the potential effect of national cultureon quality management. Daniel and Reitsperger (1994), Yavas (1995),Pavett and Whitney (1998) have produced some of the pioneering workin this area.

In a 1991 cross-industry (e.g., automotive, banking, computers,healthcare), cross-country (Japan, Germany, and the U.S.) study ofquality management practices, Hammond found a consensus amongcountries and industries in terms of how quality management was de-fined. For example, all of the respondents from the three countriesagreed that quality standards, technical accuracy, and customer ap-proval are aspects of quality. The same study found, however, that re-spondents from the three countries differed in ranking the importance of

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the various aspects of quality. For example, the Germans emphasizedproduct standards, the Japanese valued precision and accuracy higherthan did the other two groups, and the Americans were more highlyconcerned about customer approval than were the other two nationali-ties (Hammond, 1991). Lewis (1992) found no significant differencesbetween Spanish and American quality assurance managers in terms ofvarious characteristics of total quality management (TQM). Anothercomparative study found that upper management in U.S. firms ratedworker participation in management and employee empowerment to re-port and correct problems higher than did their Mexican counterparts(Knotts and Tomlin 1994).

Studies by Daniel and Reitsperger (1994) and Yavas and Marcoulides(1996) have found similarities in the quality perceptions across the U.S.and Japan. All these findings suggest that managerial attitudes shapedby national culture could be at least partially responsible in determiningthe effectiveness of firms’ quality programs. The knowledge of the roleof cultural factors in the outcome of quality management practices hasan added importance since quality is now a basic business strategy in anincreasingly competitive global marketplace (Kotler, 1991).

There are opposing views regarding the transferability of manage-ment practices among firms of different national origins. The culturalistschool emphasizes country of origin and argues that it would be diffi-cult, if not impossible, to transfer management practices from countryto country because of major cultural differences. On the other hand, therationalistic school argues that management practices are rational re-sponses to such factors as industrial development, technological level,and degree of competitiveness. Comparative, cross-cultural managementhas long moved beyond such a stark presentation of the two extremeviews. Most people in the field today argue about where and how cul-ture influences management practices–not if it does at all. The presentstudy attempts to answer the question of the importance of culture andeconomic factors with regard to management of quality.

A study designed to measure the impact of national culture on thesuccess of quality management regimes must be cross-national in na-ture. In many cases, cross-national research is interpreted as a methodfor replicating the findings first derived from single-nation data (Kohn,1987). However, because of the mixed success of such cross-nationalstudies conducted in the last decade, two contrasting reactions in the lit-erature have emerged. One argued for devoting efforts to the develop-ment of different theories (Boyacigiller and Adler, 1997), while theother attributed mixed findings to a lack of methodological rigor in past


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studies (Cheng, 1994). Cheng (1994) argues for including the societalcontext in the analysis of organizations in cross-national research in-stead of using cross-national research as a method of assessing thegeneralizability of previously discovered relationships. This paper fol-lows Cheng’s (1994) suggestion and expands the inquiry to incorporaterelevant societal-level variables in the analysis of cross-cultural qualitymanagement. In addition to utilizing organizational level data, the studyincorporates societal-level predictors, such as those pertaining to a na-tion’s economic and cultural attributes. In other words, two categoriesof variables that are thought to influence quality perceptions are consid-ered. The first group of variables is context-embedded societal-level(economic and cultural attributes) variables and the other is context-ex-cluded variables. Both groups of variables are hypothesized to influ-ence quality perceptions.

In the next section, hypotheses regarding both cultural and organiza-tional variables are developed. Then data methodology, data construc-tion and variable definitions are discussed. The regression models andthe estimation technique are discussed in another section. The last twosections contain the study’s results and conclusions.

HYPOTHESIS DEVELOPMENT AND SCOPE OF THE STUDY

The thrust of this paper is to test the influence of organizational attrib-utes and societal characteristics on managers’ attitudes toward quality.There are a number of organization-level variables that can potentiallyimpact attitudes toward quality and the implementation of quality initia-tives. In this paper, only one such control variable is considered, namely,company size as measured by the number of employees.

Company size may have an effect on quality management. For exam-ple, a sense of camaraderie, cooperative attitudes toward work, and arealization that employee well-being is intimately linked to the perfor-mance of the firm might be more typical among the employees of smallfirms than would be the case for employees of large firms. Axland(1992) has suggested that small companies may be predisposed to cross-training their employees because such companies have fewer layers ofmanagement and staff.

An opposite argument can also be made. Many small companies seeTotal Quality Management (TQM) as a large company fad with littlerelevance to them. Larger firms may be able to better afford training,higher salaries and benefits, and may have greater financial stability


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than do smaller firms (Henricks, 1992). Such company features may en-able large firms to recruit and retain higher quality employees than cansmall firms and, thus, to produce better quality products. In analyzingthe success of “quality function deployment,” a TQM tool that incorpo-rates customer input into new product and process design, Ettlie (1993)found that success was positively related to firm size. On the other hand,Barrier (1992a, 1992b) argued that TQM can work in either large orsmall firms, although its specific implementation may have to be tai-lored to firm size.

Furthermore, it is clear that countries differ in their levels of eco-nomic development. Therefore, it may be reasonable to expect manage-rial quality perceptions to be different in countries that differ in theirstages of economic development. Lee, Roehl and Choe (2000), amongothers, include level of development among the factors that drive theconceptual model of national management style and national manage-ment system. [Gross domestic product, GDP, is used as a proxy for thelevel of development.]

Given the differences in reasoning and the lack of empirical data, it isimpossible to know just how the factors of firm size and GDP may impactthe implementation of quality processes. However, that ambivalencedoes suggest that it is important to explore how those factors interact withother variables such as national culture. Research conducted by Hofstede(1980 and 1993), for example, indicates that managerial and organiza-tional practices may be different in countries that belong to different clus-ters, depending on cultural value similarities. Based on his classic study(Hofstede, 1980) consisting of analyses of questionnaire responses ofover 116,000 employees in 40 countries, Hofstede concludes that it ispossible to classify work-related values into four dimensions: individual-ism versus collectivism, power distance, uncertainty avoidance, andmasculinity versus femininity. Hofstede (1980) defines individualism-collectivism in terms of the individual’s preference for independent orinterdependent relationships. “Power Distance” measures the distancebetween the authority figure and the subordinates. “Uncertainty Avoid-ance” captures the extent to which people try to avoid ambiguous situa-tions. “Masculinity vs. Femininity” gauges the dominant values in asociety regarding assertiveness, recognition, and creating challenges.Hofstede (1993) suggests that these value dimensions influence prefer-ences or tendencies toward certain organizational practices. For exam-ple, the degree of individualism within a culture will be related to thedegree of participation in organizations and the hierarchical nature ofworker-manager relations.


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The countries included in this study are the United States, Japan,Hong Kong, Singapore, Taiwan and Turkey. They were chosen in partbased on the level of cultural differences the countries exhibit. Whilethere are numerous studies devoted to quality management practices ofJapanese and U.S. managers, there are not many studies on such prac-tices in emerging nations. The question arises regarding where manag-ers from such economies stand with regard to their views on qualitymanagement. This issue is particularly important for international com-panies that are trying to become global organizations “ . . . in the senseof having a seamless or borderless approach to organization” (Ralstonet al., 1997).

Cross-national differences among companies may be more pro-nounced than are organizational culture differences among companieswithin a given country. For example, while there are differences amongJapanese firms, it has been argued that they as a group share some com-mon characteristics. The importance of market share, participation ofworkers and middle management in decision-making, long-term com-mitments to suppliers, and flexible manufacturing are identified byLee, Roehl and Choe (2000) to be some of the common characteristicsamong Japanese companies. In contrast, U.S. firms tend to be driven byshort-term profits, to work with many competitive suppliers and to havea hierarchical structure for decision-making. However, while both mod-els are important to study as the twenty-first century begins, many peo-ple in business expect neither the Japanese nor the American model tobe dominant . . . The Chinese model, somewhere between the previ-ously cited two, may come to dominate thinking in Asia and beyond(Fukuda, 1993). The essence of the Chinese system is cooperation, as itis in the Japanese system. The difference is that, while the Chinese co-operate within a family (extended family), they are not society-orientedlike the Japanese. Thus, while teamwork is very common in Japan, it isnot commonly practiced outside the family in the Chinese tradition(Fukuda, 1993).

Cultural differences pertaining to management styles are also foundin several other studies. For example, investigating managerial behav-ior within the Turkish context, Kenis (1977) found that Turkish first-line supervisors used participative management less often than did theirAmerican counterparts, and the American supervisors had a slightly higherneed for independence than did their Turkish counterparts. Marcoulides,Yavas, Bilgin and Gibson (1998) demonstrated that Turkish managersemphasized the autocratic leadership style to a greater extent and theconsensus style to a lesser extent than did the U.S. managers.


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Turkey, one of the fastest growing economies in the world during thepast decade (U.S. Department of Commerce, 1998), is a country thatbridges the continents of Asia and Europe and has elements of bothWestern and Eastern traditions as well as ideologies. The younger pri-vate sector managers in Turkey are quite open to modern managementtechniques. For example, total quality management (TQM) has wide-spread acceptance and implementation in many companies. At the sametime, however, traditional approaches to business continue to be domi-nant in a large number of organizations.

Discussing the four cultural dimensions in the context of the countriesincluded in this study, we note the following: In terms of individual-ism-collectivism (IDV), the U.S. managers demonstrated strong individ-ualistic tendencies, whereas Japanese, Chinese, Hong Kong, Singapore,Taiwanese and Turkish managers were collectivist (see variable IDV inTable 1). In the contrasts within a different dimension, the U.S. manag-ers demonstrated little power differences (PDI) and low-uncertaintyavoidance (UAI), whereas Chinese managers demonstrated strong powerdifferences and a strong tendency to avoid uncertainty. Finally, in termsof masculinity/femininity (MAS), U.S. and Japanese managers demon-strated the agenetic tendencies that coincide with masculinity, whereasChinese and Turkish managers demonstrated the communal tendenciesthat coincide with femininity. Table 1 reveals the values for four cul-tural dimensions in the sample countries.

Research indicates that such cultural configurations as the foregoingmay result in different managerial behaviors (e.g., Offermann andHellmann, 1997). Countries with a lower than average score on individ-


TABLE 1. Descriptive Statistics on Respondents and Cultural Characteristicsby Country

Hong Kong Japan Singapore Taiwan Turkey USA Total

Number of Firms 6 6 3 13 14 13 55

Number of Observations 50 42 6 38 52 100 288

Employment Ave. 969 741 512 351 951 5,517 2,421

Min. 46 200 225 20 20 125 20

Max. 7,000 1,700 600 750 5,000 65,000 65,000

GDP 16,461 15,095 12,633 12,000 3,818 17,986

IDV 25 46 20 17 37 91

PDI 68 54 74 58 66 40

UAI 29 92 8 69 85 46

MAS 57 95 48 45 45 62

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ualism (e.g., Japan, Hong Kong, Taiwan, Singapore and Turkey invarying degrees) might favor group over individual decision-making.On the other hand, countries scoring higher than average on individual-ism (e.g., the USA) might display the opposite tendencies. Similarly,the existence of larger power distances indicates the extent to which un-equal power distribution in institutions and organizations is accepted bya society. Small power distance (PDI) countries (USA) may demon-strate preferences for decentralized organizations compared to prefer-ences in countries with higher scores on this dimension (Japan, HongKong). It appears that Chinese, Japanese and Turkish managers havemore of a need for affiliation and individual identity as determined onthe basis of group membership than do their American counterparts. Inthese three countries, conformity to group norms and traditions is ex-pected; trust and reliance within the group are important. In theHofstede (1980) study, femininity expresses the extent to which com-munities value caring for others, quality of life, and people. Hong-Kong, Singapore and Taiwan are associated with the so-called morefeminist aspect while Japan and the US are considered to be more mas-culine societies (MAS).

One of the main conclusions of the quality management movement isthe importance of teamwork. If one can assume that group orientation(as opposed to individual orientation) is directly related to teamwork,then a hypothesis may be advanced that there is a positive relationshipbetween teamwork and quality orientation. Therefore, countries that areidentified as being very different on the individualistic-collectivist(IDV) scale (Hofstede, 1980 and 1993) should thus exhibit different at-titudes toward quality and its management. The expectation is that thelower the IDV scores, the greater the likelihood of teamwork. Hence, anindirect relationship is expected between IDV and quality perceptions.The other dimensions of culture included in the study are: power dis-tance (PDI), Uncertainty Avoidance (UAI), and Femininity-Masculin-ity Index (MAS). Even though no hypotheses are postulated a priori,these variables are intended to serve as proxies for societal characteris-tics that might influence manager attitudes towards quality.

Finally, with respect to economic variables, another hypothesis testedin the present study posited that the level of economic development isdirectly related to quality perceptions. Data obtained from managers inthe sample nations are treated as organizational attributes, while thelevel of economic development (measured by per capita gross domesticproduct) is used as a predictor variable. In short, two types of vari-ables–those that pertain to the organization and those that pertain to the


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country in which the organization operates–drive the conceptual modelof quality management. The latter group, societal-level variables, in-cludes national culture. In accordance with the rationalist approachto cultural influences, the expectation is that cultural variables wouldnot be statistically significant. The finding of statistically significant in-fluence of the cultural factors, on the other hand, would support theculturalist view of divergence.

DATA AND METHODOLOGY

This paper relies on data collected and used in a study by Yavas andMarcoulides (1996). The investigators obtained the data via a question-naire from 55 companies located in six countries. Table 1 details theparticipants’ characteristics. The study developed a quality inventory con-sisting of variables representing the perceptions of different dimensionsof product quality that were drawn from recent TQM literature. Thequestionnaire used incorporated variables that are likely to reflect themain characteristics of quality management.

Yavas and Marcoulides (1996) administered 450 questionnaires to asample of middle managers working for firms in the electronics indus-try located in the U.S., Japan, Taiwan, Hong Kong, Singapore and Tur-key. The study targeted middle managers because they were assumed toknow more about what actually takes place in the workplace than do topechelon executives. An overall response rate of 64 percent resultedfrom the query. The participants responded to a questionnaire that con-sisted of 33 questions (opinion statements) each relating to a differentdimension of quality. Respondents were asked to indicate their percep-tions regarding different attributes of quality, with a five-point Likertscale used to measure the responses.

Yavas and Marcoulides (1996) conducted factor analysis on the 33items and, subsequently, the original questions were reduced to 18,grouped into six categories (factors). The continuum of six factors (cat-egories) captures different aspects of quality management. The factorsare named as follows: “communication/shared definition,” “quality ex-ecution,” “commitment,” “control/responsibility,” “current status,” and“measurement.” It should be noted that these factors are similar to thoseidentified as essential in other studies on quality management (Ander-son, Rungtusanatham, and Schroeder, 1994; Pavett and Whitney, 1998).


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ESTIMATION

This study, which uses a different methodology than did the Yavasand Marcoulides study (1996), tests both context-embedded and con-text-excluded relationships. The context-embedded variables are thelevel of economic development (measured by per capita GDP) and cul-tural variables. The later include individualism vs. collectivism index(IDV); distance between the authority figure and the subordinates (cap-tured by power distance index, PDI); risk aversion (gauged by uncer-tainty avoidance index, UAI); and the dominant values in a societyregarding assertiveness, recognition, and creating challenges (measuredby masculinity vs. femininity index, MAS). The four index variableswere constructed by Hofstede (1980). The context-excluded variablethat links an organizational level variable to others is organizationalsize measured by number of employees (EMP).

The regression equation takes the following general form:

QP = f(EMP, GDP, IDV, PDI, MAS, UAI)

The independent variables are explained above. The dependent vari-able, QP, is a proxy for managerial perceptions of quality. The value ofQP is measured by the responses received from the survey participants.Only the responses to the 16 items, grouped into five categories by thefactor analysis, are considered. Figure 1 graphs the model’s variablesand shows how these variables load on the factors (categories). Basedon an initial set of regression results, one question from each of the fivecategories is selected for the final analysis.

The five survey questions/items (dependent variables) are: I4–“Mid-dle management is strongly committed to quality”; I5–“There is ade-quate communication in my company”; I20–“Product quality is theresponsibility of the manufacturing”; I26–“Product quality is deter-mined by its durability”; and I28–“There are quality standards in my in-dustry to which my company adheres.” Summary statistics on thesequestions are given in Table 2.

On the survey, respondents registered their answers based on a five-point Likert scale, where a response “1” indicated “strong disagree-ment” and “5” meant “strong agreement.” By design, the dependentvariable takes a special form of a dichotomous variable, namely an or-dered, or ordinal, categorical variable. The coefficients of regressionequation with this type of dependent variable are best estimated with an


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I3

I4

I8

l5

l6

l7

I11

I16

I20

I25

I26

I14

I17

I18

I28

I30

F1

F2

F3

F4

F5

FIGURE 1. Factor Analysis Model

F1 = Commitment to Quality F4 = MeasurementOur employees have high quality commitment (I8) Product quality is measured by performance (I25)Top mgt. is strongly committed to quality (I3) Product quality is measured by durability (I26)Middle mgt. is strongly committed to quality (I4)

F2 = Communication/Shared Definition F5 = Execution/ImplementationAdequate communication between departments (I5) Rework should be done at problem stage (I17)Quality is defined same in all departments (I6) Improving quality leads to more sales (I18)Quality is defined same at all org. levels (I7) Our company warranties its products (I30)

SPC techniques help improve quality (I14)F3 = Control/Responsibility We adhere to industry quality standards (I28)Inspections help improve quality (I16)Quality is responsibility of manufacturing (I20)QC Workshops help understand quality (I11)

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ordered-probit regression technique. Details of this estimation proce-dure can be found in LIMDEP (1998), and the statistical properties ofthe technique are discussed in McKelvey and Zavino (1975).

RESULTS

An ordered-logit approach has been utilized to evaluate the relativeimportance of all variables and to test the main hypotheses of the pa-per. Several regression estimations for each of the five items havebeen conducted, in which each estimate consisted of a different com-bination of the societal and organizational variables. In every estimate,the coefficient of the variable MAS (masculinity-femininity index)consistently proved to be insignificant and thus was dropped from theregressions. The final estimates include the other five as the explana-tory variables.

The regression results are given in Table 3. The overall significanceof the independent variables can be tested using the “likelihood ratio”statistic. For large sample sizes, the test statistic λ equals to �2[L(β')�L(β)], where L(β') is the value of the likelihood function if the vari-able coefficients are restricted to be zero and L(β) is the value of thelikelihood function of the unrestricted model. This statistic has a χ2 dis-tribution, with degrees of freedom equaling the number of independentvariables.

In all of the models, the included variables, as a group, are significantpredictors of the dependent variables indicated by the significance oftheir respective χ2’s.


TABLE 2. Descriptive Statistics on Items by Country

HongKong

Japan Singapore Taiwan Turkey USA Total

I4 Middle management isstrongly committed to quality

MeanStd. Dev.

4.26(0.75)

4.19(0.94)

3.67(1.21)

3.29(1.01)

4.13(0.95)

3.90(0.97)

3.96(0.98)

I5 There is adequatecommunication in my company

MeanStd. Dev.

3.82(1.04)

3.00(1.15)

2.83(1.17)

3.47(0.97)

3.65(1.05)

2.93(0.98)

3.29(1.09)

I20 Product quality is theresponsibility of themanufacturer

MeanStd. Dev.

3.28(1.47)

4.21(1.09)

3.33(1.37)

3.16(1.42)

3.04(1.61)

2.64(1.57)

3.15(1.55)

I26 Our product quality isdetermined by its durability

MeanStd. Dev.

3.62(1.09)

4.26(0.73)

3.83(0.41)

3.50(1.03)

3.54(1.09)

3.78(1.04)

3.74(1.03)

I28 There are quality standardsin my industry to which mycompany adheres

MeanStd. Dev.

3.80(1.09)

3.95(1.08)

4.17(0.98)

3.32(0.93)

4.29(0.85)

4.04(0.99)

3.94(1.02)

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The interpretation of the estimated coefficients is different thanthat of linear regression coefficients. Here a coefficient represents thechange in probability of being in a higher response category, as a resultof a unit change in the independent variable. The signs of the coeffi-cients indicate whether the independent variable increases or decreasesthe probability of moving up the response categories. That is, the higherthe value of the estimated coefficient, the greater is the likelihood thatthe respondent agrees strongly with the question.

It can be gleaned from Table 3 that the organizational variable, firmsize (EMP), is statistically significant at a 5 percent level in two out ofthe five models. Among the societal variables, GDP, which captures thelevel of economic development, is significant in four of the five cases.Among the included societal variables, “Individualism-Collectivism”(IDV), “Power Distance” (PDI), and “Uncertainty Avoidance” (UAI)are significant at a 5 percent level or better in two, three, and four out ofthe five equations, respectively.

An examination of the results from individual equations reveals thatthe direction of influence of the independent variables on the dependentvariable differs depending on the equation being estimated. The posi-tive signs of the significant variables indicate that when their magni-tudes increase, the likelihood of the respondents agreeing with thestatement increases. A negative sign indicates otherwise. For example,managers from larger companies, ceteris paribus, are more likely toagree with the statement (Item 4) “Middle management is strongly com-mitted to quality.” The same is also true with managers from cultureswhere risk avoidance (UAI) is high. The findings in this study confirmthe findings of some of the studies discussed earlier, but they negate


TABLE 3. Ordered Probit Regression Results

Variables EMP GDP IDV PDI UAI χ2

I4 Middle management is stronglycommitted to quality.

0.00003* �0.00004 �0.0112** �0.0395** 0.0077** 32.8

I5 There is adequate communicationin my company.

0.000003 �0.00007* �0.01783* �0.0356** �0.0075** 31.8

I20 Product quality is the responsi-bility of the manufacturer.

�0.000009 0.00010* 0.002919 0.0435** 0.0195* 32.9

I26 Our product quality is deter-mined by its durability.

�0.00001** 0.00007* 0.00602 0.01687 0.0136* 16.2

I28 There are quality standards inmy industry to which my companyadheres.

0.000001 �0.00006* 0.00662 �0.00860 0.00207 19.8

*indicates significance at 1% level, **indicates significance at 5% level, ***indicates significance at 10% level.

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others. A priori, no specific hypothesis concerning the impact of organi-zation size or uncertainty-avoidance variables was postulated. In con-trast, coefficients of both IDV and PDI are negative, suggesting thattendency toward individualism and emphasis on hierarchy can have anegative influence on middle management’s commitment to quality.These findings confirm an earlier hypothesis that there is a positive rela-tionship between teamwork and quality orientation; i.e., an indirect re-lationship was expected between IDV and quality perceptions.

The results from Item 5: “There is adequate communication amongthe departments in my company” show negative signs for all of the sig-nificant variables, GDP, IDV, PDI, and UAI. This result may be inter-preted as follows: the probability of managerial agreement with thestatement declines as the levels of the above variables increase. Thenegative impact of increased levels of IDV, PDI, and UAI on manage-rial perception of the adequacy of inter-departmental communication isnot surprising. What is revealing, however, is that a similar sentimentalso exists among managers from high-GDP countries.

GDP, PDI and UAI are the only significant variables in equation Item20; these variables all have positive signs. The interpretation is that thehigher the values of these variables, the higher the probability of agree-ment with the statement: “Product quality is the responsibility of themanufacturer.”

It is interesting to note that managers from smaller companies (lowEMP) are more likely to agree with Item 26, “Product quality is deter-mined by its durability,” than are larger sized companies. One plausi-ble explanation is that smaller companies, lacking the brand and namerecognition of their larger counterparts, rely more heavily on prod-ucts’ durability to stay competitive and maintain market share. Theother statistically significant variables, GDP and UAI, have positive co-efficients, indicating that in higher GDP and higher uncertainty-avoid-ance countries, company officials are more likely to identify qualitywith durability.

Finally, with respect to Item 28: “There are quality standards in myindustry to which my company adheres,” only GDP turned out to be sig-nificant. The negative sign of the coefficient indicates that as GDP in-creases, agreement with the statement declines. This result may beinterpreted as follows: In the high GDP countries, industry standardshave existed for quite some time and managers have long placed a highlevel of importance in meeting and exceeding them. This was due, inpart, to the competitive pressures facing them in their industries. Lower-GDP country managers, on the other hand, may have only recently be-


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come acquainted with such standards due to globalization and openingup of their industries to competition. Therefore, it may not be surprisingthat managers from lower GDP countries place a higher importance onthe need to adhere to such standards.

An examination of the results from each explanatory variable’s per-spective is also revealing. The variable EMP is significant only in twoof the five equations, each having conflicting signs. These results sug-gest that the size of a company has no particular influence on the mana-gerial perceptions of quality.

On the other hand, the level of economic development, measured byGDP, is statistically significant in four of the five equations. We had noa priori expectation regarding the direction of GDP’s influence on themanagerial perceptions of quality. The results, although mixed, providesome interesting insights on the role the level of development mighthave on how managers view quality issues. Managers in high-GDPcountries seem to think that the quality of the product is the company’sresponsibility (I20) and that the durability of their products is associatedwith quality (I26). The positive association between GDP and items 20and 26 may be attributed to the fact that, compared to companies fromlow-GDP nations, companies from advanced countries tend to be moreestablished, have a longer presence in their respective industries, andtheir products have longer track records. Thus, when quality is an issue,managers from advanced countries (high GDP) seem to look inward. Atthe same time, these same managers, compared to their counterpartsfrom low-GDP countries, tend to feel that middle management is notstrongly committed to quality (I4); that there is not adequate communi-cation in the company (I5); and that their company does not adhere toexisting industry quality standards (I28). The results from these threeequations, although they seem contradictory, actually re-affirm the con-clusions drawn from equation I20 and I26 results. The fact that manag-ers from high-GDP countries were inclined to agree with items 4 and 5suggests that such managers focus to a greater degree on the company todeliver quality than do managers from low-GDP nations.

The results related to item 28 are consistent with the other conclu-sions regarding GDP. Companies in high-GDP countries have a longerhistory with quality management, higher quality expectations, and betterquality monitoring systems than do companies in low-GDP nations.Consequently, companies in high-GDP countries are likely alreadymeeting or exceeding quality norms in their industries; they also proba-bly have sufficient name recognition, and their products have industry-wide acceptance. In many cases, the contractual terms and conditions


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mandate quality standards, such as ISO 9000. Thus, it is important todifferentiate between those standards that are required and those thatare optional. Conversely, in order to find markets and acceptance fortheir products, managers from lower-GDP countries, may be more con-cerned with quality standards than are managers from high-GDP coun-tries. As a result, outside affirmation regarding the quality of theirproducts may be more critical for these managers than it is for managersin high-GDP countries. These findings concerning GDP might have asmuch to do with a given country’s level of development as the culturaldifferences that the level of development often perpetuates. Overall,managers from high-GDP countries appear to be more concerned aboutquality, and therefore place this burden of concern on the their compa-nies than do the managers from low-GDP countries.

The influence of IDV and PDI on managerial perceptions of qualityis very similar to the influence associated with GDP. Focusing on thestudy’s statistically significant results reveals that managers from coun-tries in which individualism reigns (high IDV) and in which a largepower distance exists (high PDI score) tend to perceive quality problemsin their organizations. Such managers also seem to feel that product qual-ity is the responsibility of the company. These same managers are alsolikely to agree that middle management is not strongly committed toquality and that there is not adequate communication in their organiza-tions. These results are not surprising: management’s commitment toquality appears to suffer in companies in which individualism increases,power is more centralized, and roles for subordinates are diminished. Thenegative sign attached to IDV confirms the hypothesized relationship be-tween organizational commitment to quality and group orientation. Thefindings can also be interpreted to mean that collectivist cultures have thepotential to produce positive results on quality.

The variable that captures the attitude towards risk (UIA: uncertaintyavoidance) is significant in four out of five equations. Overall, this vari-able seems to have a positive influence on managers’ perceptions ofquality. Managers from risk-averse cultures appear to take quality is-sues seriously, while they seem to express more dissatisfaction con-cerning the level of communication in the company (I5).

CONCLUSIONS

To summarize, this study utilized what is known as the contextual ap-proach to cross-national research. In the contextual approach, there is


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an additional level of observation–the societal level (the level on whichindependent variables are observed) in addition to the organizationallevel. In this approach, the focus of analysis centers on whether or notthe expected relationship between the dependent organizational vari-able and the societal-level variable is confirmed or rejected by the data.

The study reveals that organization size (EMP) does not have consis-tent or discernable impact on managers’ perceptions of quality, althoughit is positively and significantly related to middle management’s commit-ment to quality. The results also suggest that managers in high-GDPcountries take a more responsible attitude towards their companies’ rolesin delivering quality products than do managers in low-GDP countries.High-GDP managers seem to rely more heavily on their companies andproducts with regards to quality compared to their counterparts fromlow-GDP countries, who tend to put more emphasis on having outside af-firmation as to the quality of their products. Among the cultural variables,individualism (IDV) and power distance (PDI) had the most significantand negative impacts on overall perceptions towards quality. This findingconfirmed the negative connotation generally associated with individual-ism and hierarchy. On the other hand, uncertainty avoidance (UAI)proved to have a generally positive influence on how managers approachthe quality issues in their organizations.

The results of the study provide support for both the culturalistschool (divergence) and, to a lesser extent, the rationalist (convergence)perspectives. It appears that managers in the countries studied are famil-iar with a range of issues dealing with quality and its implementation.This familiarity may be due to the impact of globalization on busi-nesses. However, managers responding to this study’s questionnairetended to have different perceptions of quality dimensions based ontheir cultures. Therefore, this study’s findings indicate the importanceof maintaining a balance between forces of globalization, which tend toencourage uniformity of practices and a broad range of behaviors acrosscultures, and forces of cultural determination and adaptation.

This study also represents an initial step toward evaluating a model ofquality management across different cultures. The study bears both sub-stantive and methodological implications for future cross-cultural busi-ness research. Knowledge of the perceptions of managers from differentcultures will improve the understanding of managerial effectiveness andaction, especially in work environments that are becoming increasinglydiverse in terms of employees’ social and cultural backgrounds.

Finally, one shortcoming of the study should be mentioned. Whileculture is an important determinant of managerial behavior, its effect


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tends to be difficult to separate from the effects of other societal-levelvariables. Even though cultural indices such as IDV, PDI and UAI arecommonly used in cross-cultural research, these measures might fallshort of precisely capturing the essence of national cultures. It may wellbe that these currently accepted indices are better proxies for otheromitted societal-level or organizational-level variables. Therefore, fur-ther research is warranted.

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Documents

Cultural and Economic Determinants of Managerial Perceptions of Quality