Executive Insights:

Corporate Culture and Market Orientation: Comparing Indian and Japanese Firms

The authors examine how organizational dimensions, including corporate culture and market orientation, affect performance in major Indian firms. The research uses a framework (the universal high performance model] developed in the United States and first tested in Japan to assess Indian organizational business-to-business relationships. Although there are some intuitively obvious substantive differences between Indian and Japanese companies, the general pattern of how various factors drive business performance is similar in both countries despite the different economic environments in India and Japan.

ABSTRACT

As the world economy globalizes, scholarship on management issues is sharing in the process of globalization. Theories and concepts drawn primarily from the industrialized, market-organized (often Western) economies frequently are adapted in various degrees for use elsewhere. At this time, special interest focuses on the extent to which such approaches to management are relevant to the many economies that are in the process of replacing some elements of command structures with more market-oriented ones. This article deals with how various elements of a research program on organizational culture and market orientation transfer from one environment to another. We contrast results of studies in Japan and India. A cross-cultural comparison of factors that affect corporate performance requires a reasonable theoretical basis for measurement, including some a priori evidence of conceptual robustness. This article uses such a framework, which was developed on the basis of theories primarily drawn from Western industrial countries with the support of the Marketing Science Institute, a major industry-supported U.S. research organization. In this framework, high-performance firms are hypothesized to share four key characteristics: 1. 2. 3. 4. A high degree of market orientation, Innovativeness, Organizational climates of openness and trust, and An externally oriented organizational culture.

Rohit Deshpande and John U. Farley

THEORETICAL FRAMEWORK FOR THE COMPARISON

Submitted February 1999 Revised June 1999 Journal of International Marketing Vol. 7, No. 4, 1999, pp. 111-127 ISSN 1069-031X

The first application of the framework was in Japan (Deshpande, Farley, and Webster 1993). Research in several other

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highly industrialized triad couutries (Deshpande, Farley, and Webster 1997) indicates that, relative to their national peers, successful firms share these characteristics. This "universal high performance model" has proven itself robust enough that it deserves tests in other environments as well. In this article, we survey major Indian firms so that we can compare results from two Asian countries that are very different India and Japanusing exactly the same data-collection methodology as first was applied in the latter country (Deshpande, Farley, and Webster 1993). Because the framework is described in intricate detail in this previous article, we indicate only the bare nature and history of the elements here. Market orientation is the central element of the management philosophy based on the marketing concept (Drucker 1954; Levitt 1960; Webster 1988), in which it is presumed to contribute to long-term profitability. Market orientation (also referred to as "customer orientation" or "customer focus") is "the set of cross-functional processes and activities directed at creating and satisfying customers through continuous needs assessment" (Deshpande and Farley 1998, p. 213). In this research program, we measure the market orientation of suppliers from their own point of view and that of their suppliers, a unique feature in the now substantial empirical body of work on market orientation (Deshpande 1999). Organization innovativeness has importance for aggregate economic growth that many economists have noted (Mansfield 1977). Others have linked organizational structure, strategy, and innovativeness together with performance (Capon et al. 1992) and suggested that a firm must be innovative to gain a competitive advantage in order to survive and grow. Organizational climate is an enduring characteristic of the internal decision-making environment of the firm experienced by its members. It has a long tradition in organizational research (Taguiri and Litwin 1968). Climates that encourage innovativeness, communication, participation, decentralization, friendliness, and trust have been related to higher performance (Capon, Farley and Hoenig 1997; Capon et al. 1991). Organizational culture is the pattern of shared beliefs and values that help individuals understand an organization and provide them with norms for behavior (Deshpande and Webster 1989; Weick 1985). We use the following four classifications developed by Quinn and others (Quinn 1988; Quinn and Rohrbaugh 1983): Competitive culture is characterized by an emphasis on competitive advantage and market superiority; Rohit Deshpande and John U. Earley

112

Entrepreneurial culture emphasizes innovation and risk taking; Binreaucratic cultinre is characterized by internal regulations and formal structures; and Consensual culture emphasizes loyalty, tradition, and internal focus. In practice, employees view their organizations as having a mixture of these four types of culture but with emphasis on particular types. Deshpande, Farley, and Webster (1993), for example, find that large Japanese firms were both highly consensual and highly competitive, average in terms of bureaucracy, but very low on elements of entreprenevirial culture. Hypotheses pertaining to performance follow from the general nature of the theoretical constructs (as per our previous discussion of the universal high performance model). Performance is 1. related positively to market orientation; 2. related positively to innovativeness; 3. related positively to an organizational climate of openness and trust; and 4. related positively to external orientation in organizational cultinrethat is, to the extent of entrepreneurial and competitive culturesand related negatively to the extent of consensual and bureaucratic cultvu-es. In setting the context for this article, we are interested in differences in national culture generally and in the nature of the economic systems as they affect managers. The differences between Japan and India on both of these dimensions hardly could be more striking, even though both are ancient Asian cultures. Japanese per capita income is 100 times that of India, and historical and cultural characteristics such as religion and education are also in sharp contrast. It is exactly the extent of this contrast that makes it important to engage in comparative research to determine whether empirical results obtained in one country are generalizable to others. Cross-cultural research on management usually requires a conceptual foundation to position the national cultvires under comparison. This problem is not an easy one. Fortunately, on the basis of a quarter century of research, Geert Hofstede (1980, 1991, 1994) has developed four dimensions of differences in values that constitute elements of national cultures that are especially relevant to research on management. These four dimensions conceptualize "the collective programming of the mind, which distinguishes members of one group from those of another" (Hofstede 1994, p. 4). This

THE ENVIRONMENTS W E ARE COMPARING

Hofstede and National Cultures

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collective programming affects how people organize as both leaders and followers in terms of AATitten or unwritten rules. The means of scores reported by Hofstede for organizations in Japan and India are shown in Table 1, along with a brief description of each dimension. It is evident that (1) there is considerable variability in the scores between the two countries; more specifically, (2) India shows relatively high power distance, which may imply the prevalence of relatively bureaucratic organizations, and relatively low uncertainty avoidance, which may imply relatively entrepreneurial organizations. In contrast, Japanese firms have very high scores on uncertainty avoidance, which may indicate a tendency to avoid entrepreneurial forms of organizations; (3) there is no clear "Asian" model of national culture, at least in the sense that the two Asian countries do not cluster consistently at either end of the spectrum on the four dimensions. The Management Environments Despite the major differences in income levels and distribution between Japan and India, it is a mistake to think of India as preindustrial; India has one of the world's ten largest industrial intrastructiu-es (Bhagwati 1993). However, the environments in which firms have operated during the past half century in the two countries are quite different. In Japan, private firms have made up the vast majority of the post-World Was II industrial base, and they have operated in an environment that consistently encourages the use of market forces and prices to allocate resources and make Japanese exports competitive in the world market. In contrast, India, since its independence from England in 1947, has stressed stateowned industries through a rather unique structure of central planning and import substitution, with complex controls on both prices and quantities in the private sector. India has not
Country Average and (Rank Among 39 Countries) on Each Dimension Power Distance
(The degree of inequality among people that is considered "normal.")

Table 1. Position of National Cultures of India and Japan on the Hofstede (1980) Dimensions

Uncertainty Avoidance
(The degree to which people prefer structured situations in which the rules about how they should hehave are clear.)

Individualism Masculinity
(The degree to which people prefer to act as individuals, often expecting personal rather than group awards.) (The degree to which values separate roles of men and women in the society.)

India Japan Average value for 39 coimtries

77(4) 54 (21) 52

40 (33) 92(4) 64

48 [22) 46 (23) 50

56 (19) 95(1) 50

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Rohit Deshpande and John JJ. Farley

shared the explosive real economic growth experienced in the past quarter century by much of industrializing Asia; from 1965 to 1990, Indian gross domestic product per capita was approximately stable, whereas that of China, for example, doubled. By the late 1980s, it became clear that changes were needed in the Indian economy, which by then was marginalized in comparison with the increasingly global economy. The 1990s have seen some changes in both the nature of the control systems and the industries covered (Bhagwati 1993), with the goal of freeing certain aspects of the economy and partially removing structmal impediments that stifle initiative and hinder development. India is joining the growing list of countries that are replacing elements of command economies with structures more governed by market forces [The Economist 1997; Lakshmanan 1997). The cultural and managerial environments of Japan and India are thus quite different. It is precisely these differences that raise the issue of whether research results from one environment are generalizable to another. Each observation in both the Indian and Japanese samples actually is composed of four interviews. We have coined the term "quadrad" for oiu: sampling unit, because it is a double dyad of pairs of executives on each of the buyer and seller sides of a single business-to-business marketing relationship. Although this data collection method is complex and expensive, it enables us to focus on such methodological issues as the validity of measures and reliability of scales. Interviewing first was carried out with a pair of executives in a business unit (or a single business in nondivisionalized firms) in a random sample of firms whose stock is traded, respectively, on the Tokyo and Bombay stock exchanges. The interviews were conducted in the respondents' offices by professional interviewers from a commercial market research firm. Both executives were asked the same siurvey questions in the context of the same product market situation. Each respondent also was asked to name up to three important business customers, and one of these was chosen at random. Two executives from the chosen customer firms who were familiar with the supplier and the same product market situation then were interviewed. The sampling technique is cumbersome and, by economic necessity, constrains both the geographic area of the study to the commercial hubs in each country and the total number of observations (224 interviews, or 56 quadrads, in Japan; 116 interviews, or 29 quadrads, in India.) The design is also consistent with two major conclusions of the substantive literature on the appropriate units of analysis in organizational buyer behavior, in that (1) we interviewed more than one key informant within a key organizational unit to calibrate reliability of the meaExecutive Insights: Corporate Culture and Market Orientation 115 =^=^=^^=^=:^^==^^=^ METHOD AND SAMPLE

sures of organizational constructs (Moriarty and Bateson 1982) and (2) measurement on both buyer and seller sides enables us to explore the extent of agreement (Anderson and Narus 1990; Weitz 1981), which is particularly salient in our study because both manufacturer- and customer-assessed perceptions of market orientation are elements of our study. We should note that our measurement perspective is an explicitly etic one, but we recognize its shortcomings. As Berry (1969) observes, both emic and etic measurement perspectives have their own advantages and disadvantages, and hopefully our research will encourage those trained in emic methodology to complement it, because this is how greater knowledge accretion in marketing theory and practice will occur (Deshpande 1983). We were careful to establish data equivalence across Japanese and Indian samples. To establish construct equivalence, we conducted qualitative interviews with both senior managers and professional market researchers in India to ensure that the concepts served the same function in both Japan and India (functional equivalence), that the way the concepts were expressed in both countries was the same (conceptual equivalence), and that the same classification scheme was usable across both countries (category equivalence). We then pretested the survey questionnaire, working with local market research suppliers to ensure that all scaling and measurement units were usable (metric and calibration equivalence) and, through back-translation, that translation equivalence existed. Finally, we were careful to establish that there was sampling equivalence, in that the firms from both India and Japan were similar and identically sampled (as described subsequently). The operationalizations of the dependent and independent constructs use the items shown in the Appendix. The organizational culture scale was adapted from Quinn (1988). The market orientation scale was developed by Deshpande, Farley, and Webster (1993), with extensive modification of other scales developed by Kohli and Jaworski (1990) and Narver and Slater (1990). Deshpand and Farley (1999) have shown that the results from the three scales are highly correlated when measured using the same respondents. The organizational climate scale was adopted using factor analysis on a larger battery of 54 items used by Capon, Farley, and Hulbert (1988) to measure how organizational climate relates to corporate planning. The innovativeness scale was based on a canonical correlation study of innovativeness and performance by Capon and colleagues (1992). Performance was measured with a four-item scale based on the work of Buzzell and Cale (1987). ^^^=^^=^=^=^=^=^=^=
RESULTS

\\JQ report the results on the extent to which the substantive results are similar between Japan and India with regard to how these factors relate to performance, prefaced by a short description of the reliabilities of the scales used.

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Rohit Deshpande and John U. Farley

In Table 2, we show the values of the Cronbach's alpha coefficients for all variables from the Japanese sample, as reported in Deshpande, Farley, and Webster (1993), as well as those for the Indian sample. The values for market orientation, organizational climate, and performance are above the generally accepted levels in both samples. The value for the innovativeness scale is lower in India, which indicates that this scale is usable but probably should undergo further development, particularly in view of its importance in explaining performance of the Japanese firms in Deshpande, Farley, and Webster's (1993) work. The organizational culture scales play an important role in this research, and in both countries, three of the four scales clear generally accepted standards, but the fourth (which is different in the two countries) does not. On balance, they appear functional (especially because, as shown in the Appendix, the four scales are part of one overall constant sum measurement), but further replication is recommended. Unlike the scales with more consistent reliability indices, the organizational culture scales have not been subjected to testing in a wide series of applications. Organizational Cultures. The means of the Japanese and Indian organizational culture scales are quite different (Table 3). The Japanese firms are highly consensual (consistent with the consensual nature of Japanese society), but they are also quite competitive. In contrast, the Indian firms are highly entrepreneurial but relatively low on consensual culture. The entrepreneurial culture, which is most associated with risk taking, has the highest score in India and the lowest in Japan, which is a far bigger difference than on any other dimension. This result adds an element of face validity to our results because our expectation, based on Hofstede's (1994) work, was that national culture would affect organizational culture.
Cronbach's a for Scale India Organizational culture Consensual Entrepreneurial Bureaucratic Competitive Market orientation Evaluated by supplier Evaluated by customer Innovativeness Organizational climate Performance
.62 .74 .75 .45 .62 .72 .53 .69 .78

Reliabilities

Substantive Comparisons

Japan
.42 .66 .71 .82 .69 .83 .85 .69 .71

Table 2. Reliabilities of Scales Measuring Indian and Japanese Organizational Culture and Climate, Jnnovativeness, Market Orientation, and Performance

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117

Table 3. Mean Values of Scales in India and Japan

India* Organizational culture Consensual** Entrepreneurial* * Bureaucratic Competitive** Organizational climate Market orientation Evaluated by supplier Evaluated by customer** Innovativeness

Japan*
119.3 77.6 99.9 103.3 27.2 32.5 32.1 17.5

91.6 124.1 89.7 94.6 28.9 31.0 28.9 17.7

Significant overall difference between countries based on multivariate t-test. Significant difference between countries based on item-by-item ANOVA.

Organizational Climate and Innovativeness. There are no significant differences in the means of the climate or innovativeness scores in the Indian versus the Japanese samples. This is interesting becanse we were proceeding with an implicit assumption that macroeconomic differences between the countries would produce differences in the means of dimensions that affect performance. Intuitively, however, there is no reason to believe that such macroeconomic differences will affect such things as organizational climate or how innovative a firm might be. Market Orientation. There is a consistent pattern of differences in market orientation between Indian and Japanese firms with the latter having higher scores, significantly so in the case of the customer-assessed measuLres of market orientation. This by itself might not be interesting, but as we note subsequently, these results take on greater importance when we consider their impact on firm performance. In summary, the story of substantive differences between Indian and Japanese companies lies in their corporate cultvires and market orientations, rather than in their climates or innovativeness. The most prevalent organizational cultures tend to be what we might expect intuitively, based on our understanding of the differences in the two national cultures. And that Japanese firms on average are more market oriented than Indian firms probably also will not come as much of a surprise, because the customer focns of Japanese companies such as Sony and Toyota is legendary. But the most interesting part of the story lies not in the differences in the average Indian or Japanese firms, but in whether the universal high performance model plays out, that is, in the relationship between the independent variables and organizational success. The Generalizability of the Universal High Performance Model 118 The substantive comparisons also involve four hypotheses about how the independent constructs should relate to corporate performance. To make comparisons easier, the same anaRohit Deshpande and John U. Farley

lytical approach is used for the Indian data as was used for the Japanese data (Deshpande, Farley, and Webster 1993), in which discriminant functions were used to distinguish groups of more and less successful firms. The results appear in Table 4, which shows the correlations of pooled discriminating variables and the discriminant functions in each country (i.e., multivariate measures of relative partial effects). In each case, the mean centroid score of the function was positive for the high-performing firms and negative for the lowperforming firms. Thus, a positive sign in Table 4 indicates a positive relationship of that variable with performance. As a set, the signs of the coefficients relating all eight variables to performance in both countries correspond to the hypothesized signs, which is significant (a = .05) based on a sign test. The overall discriminant function is also significant at a = .05. H^: Higher levels of market orientation, particularly as perceived by the customer, should be associated with higher levels of performance. Correlations are positive in both countries for the market orientation measures from the suppliers themselves and on customers. The market orientation effect is much stronger in India than in Japan. This may indicate that effective marketing is more important in industrializing countries where attention to marketing often has been weak and in situations in which command structures (primarily centralized government planning) have held back marketing efforts even further. H^: Innovativeness and performance are correlated positively. Both correlations are positive, but the Indian coefficient is not significant. This may be related to reliability, but it also may reflect the
Correlations of Pooled Within-Group Discriminating Variables and Hypothesized Sign Discriminant Function with Performance India Organizational culture Consensual Entrepreneurial Bureaucratic Competitive Organizational climate Innovativeness Market orientation By supplier By customer -.18 .41 -.23 .09 .51 .19
.72 .80

Japan -.37 .29 -.21 .24

.47 .76

Table 4. The Determinants of Performance in India and Japan

.22 .08

67% correct

65% correct

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opposite of the preceding India-Japan comparison because of India's more recent history as an economy of relative scarcity and, thus, lesser emphasis on organizational innovation as a means to secure competitive advantage. Hj.- Positive organizational climates are related to better performance. Correlations are, in both cases, positive and significant. This represents an extension of the results reported by Deshpande, Farley, and Webster (1993), which did not include measures of organizational climate explicitly. Positive aspects of organizational climate include openness, trust, decentralization, and participativeness. H4: Organizational cultures that are relatively open to the external environments of new ideas and customers (entrepreneurial and competitive cultures) perform better than those that are more closed and inward-looking (consensual and bureaucratic cultures). All the signs of the individual coefficients are consistent with H4, but the pattern of magnitudes is again different. Entrepreneurial cultures are more important predictors of good performance for Indian firms, whereas competitive cultures are more important for Japanese firms. Face validity of the results is supported because, as expected on the basis of our discussion of general cultviral norms, consensual culture is more important for Japanese firms. DlSCUSSION We are interested here in the generalizability of a high-performance organizational profile from a highly industrialized context to an industrializing context. Firms in industrializing countries, particularly those emerging from centrally planned and/or otherwise heavily controlled economies into economies more dependent on market forces, are likely to become the subjects of considerable organizational research. Some of this research probably will be aimed at determining whether accepted beliefs about "good" management practices, which have been developed primarily in the industrial market economies, generalize to industrializing countries, particularly to those in the process of being opened more to market forces. If this type of research is lacking in the emerging economies, the firms still are likely to be advised on the basis of knowledge developed elsewhere about "good" practices of marketing in particular and management in general. We leverage the relatively rare case of multicountry, multirespondent methodological research on samples of major firms involving multiple respondents in a sample of pairs of buyer-seller relationships. It is important to stress that this study is based on relatively small sample sizes, which in 120 Rohit Deshpande and John U. Farley

large part is dictated by the economic reality that each observation is composed of four long interviews with senior managers of supplier and customer firms. The results are in general encouraging, as follows: 1. The universal high performance model appears to generalize from an industrialized to industrializing country context. Market orientation and corporate culture are key determinants of organizational success. Market orientation might be an even more important influence on performance in India than in Japan or other industrial countries. 2. There is not a single "Asian business model" but rather a great deal of variation between Indian and Japanese firms. This seems consistent with their separate national cultures and economic histories. 3. The most successful Indian firms have entreprenevu-ial cultures, which is also the most prevalent type of organizational culture among major Indian organizations studied here. In Japan, however, the most successful firms are both entreprenemial and competitive, though the most prevalent organizational culture is consensual among the Japanese firms studied. In terms of further substantive research, we note that our work has focused on relatively large firms in relatively large cities of each country. These firms, for example, are often not the major producers of new jobs in economies such as those under study; we need more work on smaller and mediumsized firms, which are job producers. At the other end of the spectrum, we have not studied foreign customers of multinational firms; these may display quite different results from those reported here. Methodologically, it would be useful to develop a research design that offers some of the benefits of our quadrad interviews, involving multiple respondents and customer-supplier validity checks, without imposing the high cost of execution experienced in this study. This Appendix describes the measurement and operationalization of scales for market orientation, innovativeness, organizational climate, organizational cultiure, and performance. Scale Content 1. Market orientation was measured as by Deshpande, Farley, and Webster 1993. These items were used with customers, with the first-person pronoun replaced by "the supplier," which was identified at the beginning of the interview (scale was formed by adding items):

THE AUTHORS

Rohit Deshpande is Sebastian S. Kresge professor of marketing at Harvard Business School. John U. Farley is Henkel professor of industrial marketing at China-Europe International Business School, Shanghai, China, and C.V Starr senior research fellow at Dartmouth College.

ACKNOWLEDGMENTS The authors are indebted to the Center for Advanced Studies of India, the Emerging Economies Center of the University of Pennsylvania, and the Division of Research, Harvard Business School, for support of this study.

APPENDIX

Measures and Operationalizations of Organizational Culture Scales

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The statements below describe norms that operate in business. Please indicate yovir extent of agreement about how well the statements describe the actual norms in your business. Instruction: Answer in the context of your specific product/market or sendee/market business. (Circle one number for each line.)
Strongly Disagree Disagree Neither Agree Nor Disagree Agree Strongly Agree

1. We have routine or regular measures of customer service. 2. Our product and service development is based on good market and customer information. 3. We know our competitors well. 4. We have a good sense of how our customers value our products and services.

5. We are more customer focused than our competitors. 1 6. We compete primarily hased on product or service differentiation. 7. The customer's interest should always come first, ahead of the owners. 8. Our products/services are the hest in the husiness. 9. I believe this business exists primarily to serve customers.

2. Organizational culture also was measured as by Deshpande, Farley, and Webster (1993) and as adapted from Quinn (1988) These questions relate to what your operation is like. Each of these items contains four descriptions of organizations. Please distribute 100 points among the four descriptions depending on how similar the description is to your business. None of the descriptions is any better than any other; they are just different. For each question, please use all 100 points. You may divide the points in any way you wish. Most businesses will be some mixture of those described. 1. Kind of Organization (Please distribute 100 points) 122 Rohit Deshpande and John U. Earley

Points for A: (A) My organization is a very personal place. It is like an extended family. People seem to share a lot of themselves. Points for B: (B) My organization is a very djmamic and entrepreneurial place. People are willing to stick their necks out and take risks. Points for C: (C) My organization is a very formalized and structural place. Established procedures generally govern what people do. Points for D: (D) My organization is very production oriented. A major concern is with getting the job done, without much personal involvement. 2. Leadership (Please distribute 100 points) Points for A: (A) The head of my organization is generally
considered to be a mentor, sage, or a father or mother f[gin*e.

Points for B: (B) The head of my organization is generally considered to be an entrepreneur, and innovator, or a risk taker Points for C: (C) The head of my organization is generally considered to be coordinator, an organizer, or an administrator Points for D: (D) The head of my organization is generally considered to be a producer, a technician, or a hard-driver. 3. What Holds the Organization Together (Please distribute 100 points) Points for A: (A) The glue that holds my organization together is loyalty and tradition. Commitment to this firm runs high. Points for B: (B) The glue that holds my organization together is a commitment to innovation and development. These is an emphasis on being first. Points for C: (C) The glue that holds my organization together is formal rules and policies. Maintaining a smoothrunning institution is important here. Points for D: (D) The glue that holds my organization together is the emphasis on tasks and goal accomplishment. A production orientation is commonly shared. 4. What Is Important (Please distribute 100 points) Points for A: (A) My organization emphasizes human resources. High cohesion and morale in the firm are important. Executive Insights: Corporate Culture and Market Orientation 123

Points for B: (B) My organization emphasizes growth and acquiring new resources. Readiness to meet new challenges is important. Points for C: (C) My organization emphasizes permanence and stability. Efficient, smooth operations are important. Points for D: (D) My organization emphasizes competitive actions and achievement. Measurable goals are important. The four organizational culture scores were computed by adding all four values of the A items for consensual, the B items for entrepreneurial, the C items for bureaucratic, and the D items for competitive. If total values from a given respondent did not add up to 400, they were normalized to do so. 3. Innovativeness was constructed from the items used by Capon, Farley, and Hulbert (1988) to describe organizational innovativeness and later used by Capon and colleagues (1992) to study innovativeness. In a new product and service introduction, how often is your company
NEVER
First-to-market with new products and services Later entrant in established but still growing markets* Entrant in mature, stable markets* At the cutting edge of technological innovation 'Reverse scored in forming the scale. 1 2 3 4 5 1 1 2 2 3 3 4 4 5 5 1 2 3 4 5

ALWAYS

4. Performance was measured on items grounded in PIMS (Buzzell and Gale 1987; Kotabe et al. 1991) Relative to our business' largest competitor, we are:
(1) (a) Less profitable. (2) About equally profitable. About the same size. About the same market share. Growing at about the same rate. (3) More profitable.

(b) (c)

Larger. Have a larger market share.

Grovifing

Smaller.* Have a smaller market share.*

(d)

more slowly. *Reverse scored in construction of the scale.

Growing faster.

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Rohit Deshpande and John U. Farley

5. Organizational climate was measured with a subset of five scales indicated in a factor analysis of 51 items by Capon, Farley, and Hulbert (1988) and used for a cross-country comparison of U.S. and Australian firms by Capon and Farley (1993). We are also interested in your opinions about your organization's decision-making style. We would like to know whether you agree or disagree with the following statements.
strongly Disagree Disagree Neither Agree Nor Disagree Agree Strongly Agree

In our organization, there is excellent commimication between line manager and staff people. People trust each other in this organization.

Decision making in our organization is participative. 1 A friendly atmosphere prevails among people in our organization. In oiu' organization, people feel they are their own bosses in most matters.

Anderson, James C. and James A. Narus (1990), "A Model of Distributor Firm and Manufacturer Firm Working Partnerships," Journai of Marketing, 54 (January), 42-58. Berry, John W. (1969), "On Cross-Cultural Comparability," International lournal of Psychology, 4,119-28. Bhagwati, Jagdish (1993), India in Transition. Oxford: Clarendon Press. Buzzell, Robert D. and Bradley T. Cale (1987), The PIMS Principles Linking Strategy to Performance. New York: The Free Press. Capon, Noel and John U. Farley (1993), "Organizational Climate in U.S. and Australian Firms," working paper, Amos Tuck School of Business, Dartmouth College. , , and Scott Hoenig (1997), Towards a Theory of Financial Performance. New York: Kluwer Publishing Co. -, and James M. Hulbert (1988), Corporate Strategic Planning. New York: Columbia University Press. -, and Donald R. Lehmann (1992), "Profiles of Product Innovators Among Large U.S. Manufacturers," Management Science, 38 (February), 157-69. -, and David Lei (1991), "An Empirical View of Tn Search of Excellence," Management Decision, 29 (4), 12-21.

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