Journal of International Business Studies (2011) 42, 1103–1120
& 2011 Academy of International Business All rights reserved 0047-2506
Organizational structure and continuous
improvement and learning: Moderating
effects of cultural endorsement of
participative leadership
Xiaowen Huang1,
Joseph C Rode1 and
Roger G Schroeder2
1
Department of Management, Farmer School of
Business, Miami (OH) University, Oxford, USA;
2 and continuous improvement and learning will be stronger when national
Department of Organization and Strategy,
Tilburg University, the Netherlands
Correspondence:
X Huang, Department of Management,
Farmer School of Business, Miami (OH)
University, Oxford, OH 45056, USA.
Tel: þ 1 513 529 2017;
Fax: þ 1 513 529 2342;
Email: huangx@muohio.edu
Received: 6 August 2010
Revised: 12 July 2011
Accepted: 15 July 2011
Online publication date: 8 September 2011
www.jibs.net
Abstract
Building upon the culturally endorsed implicit theory of leadership, we
investigated the moderating effects of national culture on the relationship
between organizational structure and continuous improvement and learning.
We propose that the relationship between organic organizations (characterized
by flat, decentralized structures with a wide use of multifunctional employees)
cultural endorsement for participative leadership is high. We further propose
that organizational group culture will moderate the relationship between
organizational structure and continuous improvement and learning, but that
these moderation effects will be stronger in national cultures with low endorse-
ment of participative leadership. Empirical analysis of secondary survey data
collected from 266 manufacturing plants operating in three industries and
located in nine countries representing a diverse set of geographical regions
provided support for the hypotheses. Overall, our findings indicate that, to fully
realize the relationship between organic structures and continuous improve-
ment and learning, managers must actively assess the extent to which the
national culture endorses participative leadership. In cases where this endorse-
ment is weak, managers should consider the extent to which the organizational
culture will provide alternative support for the relationship.
Journal of International Business Studies (2011) 42, 1103–1120.
doi:10.1057/jibs.2011.33
Keywords: cross-cultural research; organizational culture; organizational structure;
continuous improvement and learning
INTRODUCTION
Several perspectives from the organizational theory literature
suggest that organizational structure plays an important role in
organizational learning (Foil & Lyles, 1985; Stinchcombe, 1990;
Winter, 1994), primarily through its influence on communication
patterns and decision-making processes within the organization
(Nelson & Winter, 1982; Nonaka & Takeuchi, 1995). And while
these arguments hold intuitive appeal, empirical evidence to
support them has relied primarily on case studies or small-sample
surveys. Few large-scale studies have investigated this relation-
ship, and, perhaps more importantly, none has examined the
 Structure, culture, and learning
1104
relationship using comparable measures within
organizations across cultures.
A significant portion of the prescriptive literature
implies a universal relationship between organiza-
tional structure and desirable outcomes such as
organizational learning, as indicated by the increas-
ing adoption of human resource practices that
emphasize factors including the decentralization
of decision-making as a basic principle of effective
organizational design with respect to organiza-
tional learning (Nonaka & Takeuchi, 1995; Pfeffer,
1994; Winter, 1994). However, such assertions may
be premature, given the lack of generalizability
of many existing management theories in cross-
cultural contexts (Du & Choi, 2010; Hofstede, 1983,
1991, 1993; Koontz, 1969; Tsui, 2007). Several
researchers argue that differences in cultural factors
inhibit the cross-cultural transferability and effecti-
veness of management theories (Dyer & Chu, 2011;
Gelfand, Leslie, & Fehr, 2008; Metters, Zhao,
Bendoly, Jiang, & Young, 2010). This issue may be
particularly relevant to studies of organizational
structure, as some have argued that the purpose of
organizational structure itself is not only to facili-
tate task execution but also to gain legitimacy and
cultural support (DiMaggio & Powell, 1983; Staw &
Epstein, 2000). For example, cultural differences
regarding the role of employee participation, a key
element contributing to organizational learning
(Nonaka & Takeuchi, 1995), may affect employee
reactions to organizational structures that have
traditionally been thought to be associated with
participative management practices (i.e., organic
structures; Burns & Stalker, 1961). As a result, the
effectiveness of specific organizational structures in
facilitating organizational learning may vary across
cultures.
In light of these observations, we investigated the
effect of national culture on the relationship bet-
ween organizational structure and one well-defined
aspect of organizational learning: continuous impro-
vement and learning. Continuous improvement
and learning has received significant attention
in the operations management literature (e.g.,
Peng, Schroeder, & Shah, 2008; Schroeder, Bates,
& Junttila, 2002), and has notable ties to estab-
lished literature in organizational theory, including
structural contingency theory (Lawrence & Lorsch,
1967) and the evolutionary theory of organiza-
tional processes and economic change (Nelson &
Winter, 1982). We focused on two basic research
questions. First, do national cultural differences on
the endorsement of participative leadership affect
Journal of International Business Studies
Xiaowen Huang et al
this relationship? Second, if so, does the impact
of national cultural values on participative leader-
ship endorsement vary in different organizational
contexts?
With respect to the first question, we draw upon
the culturally endorsed implicit theory of leader-
ship (CLT) proposed by House, Hanges, Javidan,
Dorfman, and Gupta (2004), which argues that the
effectiveness of specific leadership behaviors
depends on the national culture. Of the dimensions
of leadership behavior they identified, participative
leadership is particularly relevant to our study, as it
captures important cultural differences that may
affect how employees react to organizational struc-
tures and the corresponding management practices
that have traditionally been thought to be asso-
ciated with organizational learning in the litera-
ture. With respect to the second question, we
continued to decode the effect of national cultural
values on participative leadership endorsement
within the contexts of specific organizations by
examining possible substitution effects between
national culture and organizational (i.e., plant-
level) culture. We examined these research ques-
tions using secondary survey data collected from
266 manufacturing plants in nine countries.
THEORY AND HYPOTHESES
Our conceptual model is shown in Figure 1. It
proposes that organizational structure (i.e., organic,
as described below; Burns & Stalker, 1961) is related
to continuous improvement and learning, and that
this relationship is moderated by the extent to
which the national cultural values support partici-
pative leadership. Building on our theoretical focus
on the role of employee participation in the organi-
zational learning process (Nonaka & Takeuchi,
1995; Schein, 1996; Winter, 1994), our model fur-
ther posits that an organizational group culture in
national cultures that do not endorse participative
leadership will find substitutes for the moderation
effects without that endorsement.
Organizational
National cultural support
group
for participative
culture
leadership
H3
H2
Organic H1 Continuous
organizational improvement and
structure learning
Figure 1 Theoretical model.
 Structure, culture, and learning
Below we provide an overview of the key
constructs contained within the model, and deve-
lop specific hypotheses. For clarity, we use the term
national culture when referring to cultural influ-
ences outside the organization, such as prevailing
national or regional culture, and the term organiza-
tional culture when referring to the unique culture
of a business or manufacturing organization. Since
our study investigates continuous improvement
and learning associated with manufacturing activ-
ities at individual manufacturing plants, the unit of
analysis is the manufacturing plant. Consequently,
the term organization refers to a manufacturing
plant, and organizational culture refers to the culture
within a manufacturing plant.
Continuous Improvement and Learning
Continuous improvement and learning is a central
component of the total quality management
literature (Dean & Bowen, 1994; Hackman &
Wageman, 1995; Kristal, Huang, & Schroeder,
2010; Sitkin, Sutcliffe, & Schroeder, 1994), and is
often considered a key characteristic of learning
organizations (Garvin, 1993; Senge, 1990). In
general, continuous improvement and learning
stresses the propensity of an organization to pursue
incremental and innovative improvements of its
processes and products (Anderson, Rungtusanatham,
& Schroeder, 1994). Consistent with the evolu-
tionary theory of organizational processes and
economic change (Nelson & Winter, 1982; Winter,
1994), continuous improvement and learning
involves the continual updating of organizational
routines as a result of ongoing knowledge gathering
and dissemination processes (Kogut & Zander,
1992; Teece, Pisana, & Shuen, 1997). This concep-
tualization is consistent with Adler, Goldoftas, and
Levine’s (1999) notion of meta-routines, or routine-
changing routines. Continuous improvement and
learning entails constantly examining existing
organizational routines, and consequently impro-
ving them by incorporating knowledge residing
within the organization, particularly knowledge
inherent to lower organizational levels that is
assumed to be fragmented, distributed, and largely
tacit (Winter, 1994). Previous studies indicate that
learning-related organizational meta-routines such
as continuous improvement and learning play a
crucial role in an organization’s ability to adapt to
rapidly changing manufacturing environments
(Becker, Lazaric, Nelson, & Winter, 2005; Huber,
1991; Mohrman & Mohrman, 1993; Nelson &
Winter, 1982).
Xiaowen Huang et al
1105
Organizational Structure
Organizational structure defines how power and
responsibility are allocated, and how job tasks are
divided, grouped and coordinated within an orga-
nization (Daft, 2004). In their seminal book, Burns
and Stalker (1961) proposed a continuum of organi-
zational structure, with mechanistic and organic
structures on the opposing extremes. To capture
the mechanistic–organic continuum, researchers
have proposed a number of subdimensions (e.g.,
Damanpour, 1991; Germain, 1996), and yet no
agreement has been reached in the literature
regarding the specific subdimensions that should
be used to define the underlying organizational
structure. Following Huang, Kristal, and Schroeder
(2010), we consider three of the most commonly
mentioned subdimensions particularly relevant to
our study: flatness, centralization, and employee
multifunctionality (i.e., the inverse of speciali-
zation). The first two dimensions, flatness and
centralization, relate to the relative number of hier-
archical layers present, and to the dispersion of
decision-making authority, respectively, while the
third dimension, employee multifunctionality, cap-
tures the extent to which labor is divided between
narrow and broad work tasks.
Flatness describes an organization’s relative num-
ber of management levels in the chain of com-
mand. Nahm, Vonderembse, and Koufteros (2003)
define flatness as the number of layers in the
hierarchy, while Damanpour (1991) refers to a simi-
lar concept as vertical differentiation, and Vickery,
Dröge, and Germain (1999) capture the flatness of
organizational structure using the terms layers and
spans of control. Despite the variations in terminol-
ogy, researchers generally agree that this dimension
highlights an important component of structural
complexity (Burns & Stalker, 1961), as greater
numbers of managerial levels imply a more com-
plex organizational structure. Damanpour (1991)
and Hull and Hage (1982) contend that hierarchical
levels increase the number of required links in
communication channels, consequently hindering
communication across levels. On the other hand,
an expanded hierarchy with narrow spans of con-
trol is justified when the organization needs to
monitor employee behaviors closely and imple-
ment standardized policies and procedures (Gittell,
2001; Walton, 1985).
Centralization reflects an organization’s vertical
distribution of authority and decision-making.
The level of centralization indicates the degree
to which decision-making autonomy is dispersed
Journal of International Business Studies
 Structure, culture, and learning
1106
or concentrated (Daft, 2004; Damanpour, 1991;
Germain, 1996; Nahm et al., 2003; Pfeffer, 1981;
Vickery et al., 1999). In a centralized organization,
decisions are typically made at high levels of the
organizational hierarchy, with little input from
lower-level employees. Other researchers use the
terms employee empowerment or autonomy (Ahmad &
Schroeder, 2003; Liu, Shah, & Schroeder, 2006;
Spreitzer, Kizilos, & Nason, 1997) to capture the
inverse of centralization, or decentralization (Aiken
& Hage, 1966). A centralized organization normally
adopts a traditional, control-oriented, workforce–
management strategy, emphasizing management
prerogatives and positional authority. In contrast,
a decentralized organization is consistent with
a participatory work environment that empha-
sizes organizational flexibility and innovativeness
(Damanpour, 1991; Swamidass & Newell, 1987).
Employee multifunctionality refers to the pre-
valence in organizations of cross-training that
enables employees to perform multiple tasks
(Ahmad & Schroeder, 2003), which is consistent
with the literature on organizational structure in
that it captures a key aspect of how jobs and labor
are divided within the organization (Davenport &
Nohria, 1994). Similar concepts in the literature on
organizational structure include level of horizontal
integration (Nahm et al., 2003) and specialization
(Daft, 1998). Generally speaking, multifunctiona-
lity increases the diversity of tasks performed by
individual employees, provides employees with
opportunities to integrate and create new know-
ledge through job enrichment, and enhances the
flexibility of the workforce (Ahmad & Schroeder,
2003; Linderman, Schroeder, Zaheer, Liedtke, &
Choo, 2004; MacDuffie, 1995). Conversely, organi-
zations that follow functional specialization design
place a greater emphasis on efficiency (Lawrence &
Lorsch, 1967; Williamson, 1975).
These three dimensions (flatness, centralization,
and employee multifunctionality) are conceptually
interdependent, and are generally significantly
intercorrelated (e.g., Huang et al., 2010). Vickery
et al. (1999) argue that the reduction of the number
of layers in hierarchies and the empowerment of
lower-level employees to make decisions often
occur in tandem. Fewer hierarchical layers pro-
mote vertical communication and shift the locus
of decision-making downward in the hierarchy
(Nahm et al., 2003; Walton, 1985), as relatively
fewer resources (i.e., managers) exist at higher
levels to attend to the operational issues directly
affecting workers at the lower levels (Damanpour,
Journal of International Business Studies
Xiaowen Huang et al
1991; Hull & Hage, 1982). Moreover, multifunc-
tional employees are better prepared to take on the
broad range of responsibilities that accompany
flatter organizational structures, and to participate
in decision-making processes required of employees
working in decentralized environments (Mintzberg,
1983; Nahm et al., 2003; Pfeffer, 1994).
Burns and Stalker (1961) proposed that mechan-
istic systems have centralized control and authority
systems, a high degree of task specialization and
standardization, and a greater number of organiza-
tional layers. Under such systems, communication
focuses on downward communication from super-
visors to employees, and managerial control is
established through standardized rules and proce-
dures, which are generally enforced by those higher
in the organizations. Conversely, organic systems
feature a flatter structure with fewer hierarchical
layers, decentralized decision-making, and a wider
use of multifunctional employees, who focus
greater attention on informal, evolving, multidirec-
tional communication and integration processes
to coordinate work activities (Aiken & Hage, 1971;
Burns & Stalker, 1961).
Organizational Structure and Continuous
Improvement and Learning
Following Burns and Stalker (1961) and others
(Aiken & Hage, 1971; Huang et al., 2010), we view
organizational structure as a continuous variable
defined by the mechanistic–organic continuum.
We would expect an organic structure to be associ-
ated with continuous improvement and learning
for a number of reasons, two of which are parti-
cularly germane to the present study. First, several
theorists have proposed that high-level managers
are often detached from important tacit knowledge
manifested in relatively disjointed, fragmented
forms throughout lower levels of the organiza-
tion (Nelson & Winter, 1982; Nonaka & Takeuchi,
1995; Winter, 1994). The relative flatness of organic
structures allows for more efficient communica-
tion between upper-level management and those
employees possessing relevant tacit knowledge
(Winter, 1994). Additionally, the increased empha-
sis on decentralized decision-making inherent to
the organic structure allows those employees
closest to internal tacit knowledge greater partici-
pation in decision-making processes, highlighting
their roles in improving products and processes
through facts and knowledge. Together, the reduc-
tion of hierarchical levels and the increase of
employee empowerment involved in an organic
 Structure, culture, and learning
structure result in a close coupling of various
resources at both management and technical levels.
Several researchers (e.g., Dean & Bowen, 1994;
Reed, Lemak, & Mero, 2000; Sitkin et al., 1994)
claim that these practices are consistent with the
systems view of organization, which is a key princi-
ple leading to effective continuous improvement
and learning.
Second, organic structures’ use of multifunctional
employees increases the diversity of jobs perfor-
med by individual employees, and enriches their
expertise. As a result, multifunctional employees
are more likely to assimilate new concepts (Tu,
Vonderembse, Ragu-Nathan, & Sharkey, 2006) and
develop innovative ideas regarding products
and processes (Mohrman & Mohrman, 1993) by
combining and systematizing different bodies of
knowledge (Nonaka, 1994). Moreover, their multi-
functional perspectives facilitate a better under-
standing of work processes: this, in turn, increases
employees’ ability to identify problems and recom-
mend improvements (Mohrman & Mohrman,
1993). The heightened communication between
management levels and greater decision-making
authority provided to lower-level employees by
organic structures affords such recommendations
a better chance of being integrated into existing
organizational routines, resulting in higher levels
of continuous improvement and learning.
While scholars have long commented on the
relationship between organic organizational struc-
tures and organizational learning, few empirical
studies have been conducted to test this relation-
ship. As a result, we include the following hypo-
thesis to validate the presence of the relationship.
Hypothesis 1: Organic organizational structure is
positively related to continuous improvement
and learning.
Moderating Effects of Culturally Endorsed
Participative Leadership
The previous arguments propose that organic
structures legitimate and facilitate employee parti-
cipation by providing two specific mechanisms
inherent to organic structures: (1) increased access
to lower-level employees by upper management
(and vice versa); and (2) increased opportunities for
individual employees to make meaningful contri-
butions to the decision-making process. Below we
argue that the degree to which the organization can
effectively take advantage of these supporting
Xiaowen Huang et al
1107
mechanisms depends, at least in part, on the extent
to which participative leadership behaviors are seen
as both appropriate and desirable for leaders and
subordinates.
Participative leadership reflects the degree to
which leaders or managers involve others in making
and implementing decisions (Dorfman, 2004). It has
been identified as one of the six culturally endorsed
leadership dimensions in the culturally endorsed
implicit theory of leadership (CLT), a theoretical
framework developed by the GLOBE project (House
et al., 2004). Building upon implicit leadership
theory (Hanges, Lord, & Dickson, 2000; Lord &
Maher, 1991) and the cultural influence hypothesis
(Triandis, 1995), CLT argues that individual beliefs,
convictions, and assumptions concerning appropri-
ate and effective leadership behaviors are deter-
mined in large part by prevailing national cultural
values. Of the leadership dimensions proposed by
CLT, we focus on participative leadership because of
its emphasis on employee participation, which, as
described above, is a crucial element connecting
organic structures with continuous improvement
and learning.
The authors of CLT found that the endorsement
of participative leadership correlated with several
national cultural values included in the GLOBE
study (House et al., 2004), including negative rela-
tionships with uncertainty avoidance and power
distance, and positive relationship with perfor-
mance orientation and gender egalitarianism. In
general, individuals in national cultures that valued
stability over change de-emphasized the power
distance among individuals as a result of social
position, valued individual performance over
tenure or social status, and viewed genders more
equally, tended to both expect and favor participa-
tive leadership behaviors. Conversely, in other
cultures leaders are less expected to engage in
participative leadership behaviors, which subordi-
nates will likely receive unfavorably (Dorfman,
2004; Hofstede, 1983).
Thus it can be argued that cultural endorsement
for participative leadership provides a holistic
perspective consistent with how a group of related
cultural values work together in concert to affect
attitudes and behaviors regarding the role of
employee participation in the workplace. Indeed,
the GLOBE project proposed the CLT framework to
facilitate a greater understanding of cross-cultural
work attitudes, behavior and related implications,
including organizational policies, procedures and
organizational design (House & Javidan, 2004).
Journal of International Business Studies
 Structure, culture, and learning
1108
Therefore in this study we focus our empirical
model on the role of cultural endorsement of
participative leadership, rather than specific cultur-
al values dimensions. However, we recognize that
similar arguments could be used with respect to
several of the more traditionally defined cultural
values. At the suggestion of an anonymous reviewer,
we control for power distance, which the GLOBE
study reported to have the strongest association
with participative leadership of any of the cultural
values (House et al., 2004), as well as cultural
endorsement of charismatic leadership because of
its empirical associations with organizational lear-
ning. We do not include any other cultural
dimensions in the analyses presented here because
the high intercorrelations among participative
leadership, power distance and other relevant
cultural dimensions – particularly uncertainty avoi-
dance and performance orientation – resulted in
unstable models due to multicollinearity.
The impact of varying attitudes towards parti-
cipative leadership across national cultures is also
noteworthy from broader theoretical perspectives.
According to institutional theory (Oliver, 1997),
national culture, representing a key aspect of
societal context surrounding an organization, can
enhance or inhibit the optimal use of organiza-
tional resources such as management practices
(Lawler, Chen, Wu, Bae, & Bai, 2011). The realiza-
tion of the full benefits of specific management
practices requires both adoption and entrenchment
(Yeung, Cheng, & Lai, 2006; Zeitz, Mittal, &
McAulay, 1999). Following structural contingency
theory (Lawrence & Lorsch, 1969), an entrenched
practice is usually driven by congruency between
an organization and its environment. Culture, as an
important environmental factor, can either support
or hinder the entrenchment of a specific manage-
ment practice by connecting with or contradicting
the cognitive structures and deeply held values
inherent to the culture (Zeitz et al., 1999). Thus,
drawing upon both institutional theory and struc-
tural contingency theory, we propose the hypo-
thesis that when cultural values align with the
participative management philosophies supported
by organic structures, the resulting information-
sharing and participative decision-making pro-
cesses will be entrenched within the organization,
and will have a correspondingly greater effect on
cultivating continuous improvement and learning.
Conversely, in cultures where participative leader-
ship is not strongly endorsed, the organization will
be less likely to effectively realize the potential
Journal of International Business Studies
Xiaowen Huang et al
benefits an organic structure offers with respect to
continuous improvement and learning.
Hypothesis 2: The relationship between organic
organizational structure and continuous impro-
vement and learning is moderated by the extent
to which the national cultures endorse participa-
tive leadership, such that the relationship will be
stronger in high participative leadership cultures
than in low participative leadership cultures.
Hypothesis 2 highlights the importance of
employee participation in information-sharing and
decision-making processes in establishing a strong
relationship between organic structures and con-
tinuous improvement and learning. Alternatively,
in some instances individual employees may not be
motivated to participate in information-sharing
and decision-making processes, even when given
the opportunity by their formal supervisor. This
situation is likely to happen when participative
leadership is not strongly endorsed by the prevail-
ing national culture. In this case, an alternative
mechanism is needed to motivate employee parti-
cipation in organic organizational structures. Prior
research indicates that organizations reside simul-
taneously in different contextual levels, and exami-
ning multiple contextual levels can increase our
understanding of organizational outcomes (Powell,
1991; Sarala & Vaara, 2010). In addition to the
societal context associated with national culture
discussed above, institutional theorists argue that
organizational-level context can also influence the
optimal use of resources (Scott, 1991). We propose
that internal organizational culture characterizes
an important aspect of this contextual level. More
specifically, we propose that organizational culture,
or the shared values and norms that direct how
individuals in a specific organization relate to one
another (d’Iribarne, 2002; Schein, 1992), may serve
the organization as an alternative mechanism to
facilitate use of the participative work environment
provided by organic structure.
Organizational culture can be conceptualized as
schemata (Bartunek & Moch, 1987), or subjective
theories regarding how the world operates, that
are shared by members of a specific organization.
Organizational culture acts as a social control mecha-
nism (O’Reilly & Chapman, 1996) whereby members
deviating from the norm are soon noticed and
corrected (Sorensen, 2002). The existing literature
has proposed several taxonomies of organizational
culture (Detert & Schroeder, 2000). We utilize the
 Structure, culture, and learning
competing values framework (Quinn & Rohrbaugh,
1981, 1983), as this well-established cultural frame-
work has been widely used in quality management
studies (Naor, Goldstein, Linderman, & Schroeder,
2008). In particular, we focus on one specific
organizational culture type: group culture. According
to the competing values framework, group cultures
emphasize flexibility and change, with a strong
internal focus on organizational improvement.
Group culture is closely related to the human rela-
tions model (Quinn, 1988), the basic tenets of which
have been ascribed several labels, including team
orientation (O’Reilly, Chapman, & Caldwell, 1991),
clan culture (Cameron, Quinn, Degraff, & Thakor,
2006) and group culture (Cameron & Quinn, 1999;
Earley & Mosakowski, 2000; Naor et al., 2008). The
terms clan or human relations have been used in some
of the earlier writings related to the competing values
model (Cameron & Quinn, 1999). To maintain
consistency with previous literature that used the
measure included in our study (described below), we
employ the term group culture.
Group organizational cultures focus on group
support through teamwork (Cameron & Quinn,
1999). The core values of group organizational
cultures include belonging, commitment, trust and
participation. Individuals within a strong group
culture express loyalty and feel a sense of cohesive-
ness in organizations (Cameron et al., 2006). They
are more likely to express their opinions to other
group members in problem-solving and decision-
making processes, owing to their sense of belonging
to the group, as these behaviors are both valued and
normative in group cultures (Cameron & Quinn,
1999). Moreover, previous research indicates that
the senses of belonging associated with group
organizational cultures and employee participation
often reinforce each other (d’Iribarne, 2002). As a
result, group organizational cultures are associated
with higher levels of employee participation, exem-
plified through high levels of communication
among employees at the same organizational level
and participation in group decision-making pro-
cesses. All else being equal, we would expect the
focus on employee participation and information-
sharing associated with group organizational cul-
tures to complement the relative lack of hierarchy
and decentralization inherent to organic structures,
in a manner similar to participative leadership.
However, the employee participation exhibited
under participative leadership compared with group
cultures differs in at least one critical aspect: moti-
vation. Under participative leadership, employee
Xiaowen Huang et al
1109
participation is encouraged by those at the higher
levels of the organization, while in group cultures
the leadership role in facilitating participation is
less salient. Instead, the defining value of group cul-
tures (i.e., the sense of belonging and commitment)
is a key that motivates employee participation.
Cross-cultural theorists argue that the effects of
national culture on employee behavior will be
stronger than organizational culture, owing to the
pervasive influence of national culture on the
employees’ formative years and overall identities
(Hofstede, 1991; Lawler, 1986; Tata & Prasad, 1992).
Following this line of reasoning, we would expect
that when national cultures endorse participative
leadership, employee participation would occur
mainly through the adoption and entrenchment
of participative leadership practices. In this case,
the presence of organizational group culture may
be supplemental but unnecessary. In other words,
the positive relationship between organic structure
and continuous improvement and learning would
be stronger when national cultures endorse partici-
pative leadership, regardless of the presence of
group culture. In contrast, when the national cul-
ture does not endorse participative leadership,
employee participation would need to be motivated
through an alternative venue, such as organiza-
tional group culture, since participative leadership
is less likely to be effective. Under this situation,
organizational group culture becomes necessary to
strengthen the relationship between organic struc-
ture and continuous improvement and learning.
The logic behind this argument echoes the observa-
tion from Amundson, Flynn, Rungtusanatham, and
Schroeder (1997), who propose that organizational
cultures can compensate for non-supportive aspects
of national cultures through the successful imple-
mentation of management practices. We summar-
ize these arguments in our third hypothesis.
Hypothesis 3: The moderating effects of organiza-
tional group culture on the relationship between
organic structure and continuous improvement
and learning will be stronger in low participative
leadership cultures than in high participative lea-
dership cultures.
METHODS
Data Source
The data used for empirical analyses came from
Round III of the High Performance Manufacturing
Journal of International Business Studies
 Structure, culture, and learning Xiaowen Huang et al
1110

(HPM) study, which is the third phase of the World Originally developed in English, the foreign lan-
Class Manufacturing project (Flynn, Schroeder, & guage versions of the surveys were back-translated
Sakakibara, 1994; Schroeder & Flynn, 2001). The by multiple translators and compared for accuracy.
HPM study, conducted during 2005–2007 by a team Additionally, all survey instruments were initially
of researchers in North America, Europe and Asia, pilot-tested through structured interviews with
examined differences in manufacturing practices manufacturing employees, and then extensively
across plants in different countries and industries. tested and refined using large-scale data in the prior
The HPM database used for our research included two rounds of the project (Ahmad & Schroeder,
266 mid- to large-sized manufacturing plants (each 2003; Naor et al., 2008). Construct reliability and
with at least 250 employees) located in nine validity have been well established in the existing
countries and three industries (see Table 1). literature, including several research studies and
We deemed the data appropriate for the present dissertations (Roth, Schroeder, Huang, & Kristal,
study for several reasons. First, the three included 2008).
industries (electronics, machinery, and auto sup- The HPM data collection effort employed a
ply) represented important sectors of industrialized stratified design that randomly selected an approxi-
production, all of which involve complex manu- mately equal number of manufacturing plants in
facturing processes. Researchers have noted the each country and industry. Surveys were adminis-
critical role of continuous improvement and learn- tered to only one plant per manufacturing organi-
ing in maintaining organization viability and zation. The response rate was approximately 65%.
high performance, given the increasing global com- To maximize response rate, first the research team
petition endemic to these industries (Ahmad & solicited by phone the participation of plant mana-
Schroeder, 2003). Additionally, the database inclu- gers, and then research coordinators collected data
ded organizations from nine different countries on site from each plant. These coordinators were
that represented the major industrial regions of the managers with at least three years of work experi-
world. ence in the plants, and knowledge about the major
Finally, the HPM study’s survey design inclu- responsibilities of the plants’ employees. The resea-
ded several desirable qualities. For one, the HPM rch team consulted the plant research coordinator
study employed a rigorous translation procedure. to identify target respondents, based on their exper-
tise, for specific measures. Eleven different man-
agers and 10 workers/supervisors at each participating
Table 1 Sample plants classified by country and industry plant answered questionnaires containing different
Country Industry Total sets of measures. These 21 individual respondents
came from different parts of the plant.
Electronics Machinery Auto supply With respect to the measures employed in the
present study, survey items of our dependent and
Confucian Asia
Japan 10 12 13 35 independent variables were included in different
South Korea 10 10 11 31 survey questionnaires, and completed by different
individuals, which avoided the possibility that
Latin Europe our results were due to common respondent bias.
Italy 10 10 7 27 Although in some cases more than one measure
Spain 9 9 10 28 utilized respondents from the same job class, in no
cases did the same individual complete surveys that
Nordic Europe
contained measures of both the dependent and one
Finland 14 6 10 30
or more independent variables. To further avoid
Sweden 7 10 7 24
single-respondent bias, each survey was completed
Germanic Europe by multiple informants, and data were obtained
Austria 10 7 4 21 from a minimum of one informant from each of
Germany 9 13 19 41 three different job classifications (see Appendix A).
We conducted reliability analysis at the individual-
Anglo respondent level to ensure internal consistency of
United States 9 11 9 29 the scale items across informants. Following Boyer
and Verma (2000), we used inter-rater agreement
Total 88 88 90 266
statistics Rwg to measure the degree of agreement on

Journal of International Business Studies

 Structure, culture, and learning
the scale ratings by at least three respondents per
item within the same plant. All of our constructs
have inter-rater agreement coefficients above 0.70
(see Appendix B), indicating that the instruments
exhibit acceptable agreement among different infor-
mants within a plant. Since the unit of analysis is
the plant, we averaged the responses from different
informants in a given plant to determine the plant-
level measure for each item.
Measures
Organic structure, group culture, and continuous
improvement and learning were measured using
multiple items contained in the HPM database. For
each item, respondents indicated the extent to
which they agreed or disagreed with the statement
on a seven-point Likert scale, ranging from strongly
disagree (1) to strongly agree (7). Reverse-coded
items were reverse-scored to maintain the same
measurement format. The items used to measure
each scale were adapted based on existing scales
from the literature that have demonstrated reliabi-
lity and validity (Huang et al., 2010; Liu et al., 2006;
Naor et al., 2008).
Continuous improvement and learning
We used the five-item (a¼0.76) scale described by
Liu et al. (2006) to measure continuous improve-
ment and learning. This scale is a modified version
of the original eight-item scale developed by Flynn,
Schroeder, and Flynn (1999). It focuses on the extent
to which organization members value and engage in
activities that facilitate continuous product and
process improvement and learning. Sample items
included “We strive to continually improve all
aspects of products and processes, rather than taking
a static approach,” and “If we aren’t constantly
improving and learning, our performance will suffer
in the long term.” The validity and reliability of this
scale has been established in Liu et al. (2006) and
Peng et al. (2008).
Organizational structure
Following Huang et al. (2010), we operationalized
organizational structure as a composite variable
comprising three dimensions: flatness, decentrali-
zation, and employee multifunctionality. Flatness
included the two items used by Huang et al. (2010):
“Our organizational structure is relatively flat,” and
“There are few levels in our organizational hier-
archy.” Decentralization included three items taken
from Aiken and Hage’s (1966) five-item centrali-
zation scale. The items were reverse-coded prior to
Xiaowen Huang et al
1111
analyses to be consistent with the flatness and
employee multifunctionality items. A sample item
read “Any decision I make has to have my boss’s
approval.” Finally, employee multifunctionality
included three items taken from Ahmad and
Schroeder’s (2003) five-item scale, including state-
ments such as “Our employees receive training to
perform multiple tasks” and “Employees at this
plant learn how to perform a variety of tasks.”
Results of confirmatory factor analyses (described
below) indicated that the three subscales were valid
indicators of an overall organic structure variable.
The composite reliability of the overall eight-item
scale was¼0.93.
Group culture
Group culture was measured using a four-item
scale (a¼0.77) taken from Naor et al. (2008). A
sample item read “Our supervisors encourage the
people who work for them to work as a team.”
Previous research has shown this scale to be valid
and reliable (Naor et al., 2008).
We performed a confirmatory factor analysis
(CFA) to assess the reliability and validity of the
latent variables created from measures contained in
the HPM data set (Andersen & Gerbing, 1988).
Following Huang et al. (2010), we modeled organi-
zational structure as a second-order latent variable
with three first-order latent variables – flatness,
decentralization, and employee multifunctiona-
lity – which were each indicated by the items from
their respective scales. We modeled both group
culture and continuous improvement and learn-
ing as two latent variables, each indicated by the
items in the corresponding scales. Overall, the
three-factor CFA model (Appendix B resulted in
an acceptable fit to the data: w2 (109)¼246.25
(po0.01), IFI¼0.93, CFI¼0.93, RMSEA¼0.07. Item
loadings were all greater than 0.40, and the critical
ratio for each loading is significant, indicating
convergent validity (Andersen & Gerbing, 1988).
The average variance explained (AVE) across the
indicators of each latent variable was higher than
the variance shared by any two latent variables,
thereby passing a very stringent test of discriminant
validity among the latent variables (Fornell &
Larcker, 1981).
Scores for cultural endorsement of participative
leadership and for two control variables related to
national culture (cultural endorsement of charis-
matic leadership and power distance) were assigned
to each plant, based on the GLOBE study score
(House et al., 2004) for the country where the plant
Journal of International Business Studies
 Structure, culture, and learning
1112
was located.1 We included cultural endorsement of
charismatic leadership as a control variable because
both theoretical and empirical work has linked
charismatic leadership to organizational learning
(Berson, Nemanich, Waldman, Galvin, & Keller,
2006; Bryant, 2003; Vera & Crossan, 2004). As
noted earlier, we included power distance because
of its strong empirical associations with culturally
endorsed participative leadership, as well as its
arguably conceptual linkages to both employee
participation and organizational learning. We
included the “as is” power distance scores, as
opposed to the “should be” scores, because they
reflected actual cultural practices (House et al.,
2004), and are thus more strongly related to
observed behavior (House & Javidan, 2004; Javidan,
Stahl, Brodbeck, & Wilderom, 2005).
We also included plant size, captured by the sum
of the number of hourly and regular salaried
employees reported in each plant (Cua, McKone,
& Schroeder, 2001), as a control variable. We repla-
ced missing values for 36 cases with the mean size
of the plants in the sample in the same country.2
We performed a natural log transformation on this
variable to adjust for skewness. We also created
dummy variables for the electronics and auto
supply industries to control for industry effects.
RESULTS
Means, standard deviations, and study variable
intercorrelations are shown in Table 2. Overall,
the zero-order correlations were in the expected
directions. The correlation between organic orga-
nizational structure and continuous improvement
and learning was r¼0.41 (po0.01). To test Hypo-
thesis 1, we regressed the control variables and
organic structure onto continuous improvement
Table 2 Means, standard deviations, and variable intercorrelations
Variable Mean SD
1. Electronics 0.33
2. Machinery 0.33
3. Auto supply 0.34
4. Plant size 5.97
5. Power distance 5.22
6. Charismatic leadership 5.85
7. Participative leadership 5.54
8. Organic structure 4.50
9. Group culture 5.22
10. Continuous improvement and 5.56
learning
N¼266; *po0.05; **po0.01.
Journal of International Business Studies
Xiaowen Huang et al
and learning (see Model I in Table 3). As shown in
Table 3, organic structure was significantly related
to continuous improvement and learning (b¼0.46,
po0.01), thereby supporting Hypothesis 1.
To test Hypothesis 2, we added an interaction
term consisting of organizational structure  parti-
cipative leadership CLT score to the regression used
to test Hypothesis 1 (see Model II in Table 3). We
centered both variables before creating the interac-
tion term to reduce the possible effects of multi-
collinearity ( Jaccard, Turrisi, & Wan, 1990). The
interaction term was positive and significant
(b¼0.17, po0.01), thus supporting Hypothesis 2,
which predicted that the relationship between
organic organizational structure and continuous
improvement and learning would be stronger in
high participative leadership cultures. The form of
the interaction effect (Figure 2) was consistent with
the predicted effect as well.
To test Hypothesis 3, we first grouped the
countries into two subsamples, cultures with high
endorsement participative leadership and cultures
with low endorsement of participative leadership.
Our groupings followed those presented by Dorfman,
Hanges, and Brokbeck (2004) in their analysis of
the GLOBE data, with one exception: to maintain
statistical power and ensure that the high and low
groups were of roughly the same size, we categor-
ized all the countries classified by Dorfman et al.
(2004) as either medium or low into the low group.
Thus plants operating in Finland, Sweden, Austria,
Germany and the United States were placed in the
high group, and plants operating in Japan, South
Korea, Italy and Spain were placed in the low group.
We performed ANOVA comparing the differences
between the high and the low groups with respect
to their culturally endorsed participative leadership
1 2 3 4 5 6 7 8 9 10
0.49**
0.50 0.50
0.99 0.31 0.04 0.07
0.30 0.07 0.00 0.07 0.23**
0.21 0.05 0.01 0.06 0.52** 0.36**
0.40 0.05 0.00 0.05 0.43** 0.64** 0.81**
0.65 0.09 0.06 0.02 0.20** 0.26** 0.42** 0.56**
0.62 0.05 0.20** 0.15* 0.14* 0.13* 0.04 0.09 0.38**
0.49 0.09 0.12* 0.03 0.07 0.08 0.24** 0.15* 0.41** 0.52**
 Structure, culture, and learning Xiaowen Huang et al
1113

Table 3 Results of regression analyses on continuous improvement and learning

Variable b

Full sample (N¼266)b High participative Low participative

leadership cultures leadership cultures
(N¼145) (N¼121)b

Model I Model II Model III Model IV

Step 1
Auto supply 0.08 0.08 0.01 0.02
Electronics 0.02 0.01 0.04 0.03
Plant size 0.24** 0.24** 0.08 0.18*
Power distance 0.10 0.14 0.09 0.52**
Charismatic leadership 0.46** 0.52** 0.08 0.11
Participative leadership 0.31* 0.27* 0.13 0.32*
Organic structure 0.46** 0.40** 0.39** 0.07
Group culture 0.41** 0.71**

Step 2
Organic structure  participative 0.17** (0.03)
leadership (DR2)
Organic structure  group culture (DR2) 0.02 (0.00) 0.22**(0.04)

F value 14.92** 14.55** 12.23** 18.40**

Overall adjusted R2 0.27 0.29 0.42 0.57
The regression coefficients reported here are standardized.
*po0.05; **po0.01.

7
Low participative using data from the high culturally endorsed,
leadership participative leadership group and the other using
6.5 High participative data from the low culturally endorsed, participative
Continuous improvement

leadership leadership group. For each hierarchical regression

6 analysis, in the first block we entered the two
and learning

variables organic structure, and group culture, and

5.5
5 centered both variables before creating the interac-
4.5
4 in the low participative leadership sample, but was
Low organic structure
Figure 2 Interaction of organic structure and culturally
endorsed participative leadership.
scores. This analysis indicated that the differences
between groups are significantly higher than the
differences within groups, thus providing evidence
supporting the validity of our groupings.
We then performed two hierarchical regression
analyses (see Models III and IV in Table 3), one
High organic structure
in the second block we entered the interaction term
of group culture  organic structure. Again, we
tion term to reduce the possible effects of multi-
collinearity (Jaccard et al., 1990). The interaction
term was found to be significant (b¼0.22, po0.01)
not significant in the high participative leadership
sample. Results of a t-test indicated that the two
regression coefficients related to organic structure
were significantly different in the two samples as
well (t¼2.61, po0.01). Examination of the form of
the significant interaction in the low participative
leadership culture sample indicated that the rela-
tionship between organic structure and continuous
improvement and learning was stronger when
organizational group culture was high rather than
low (Figure 3). Thus Hypothesis 3, which predicted
that the moderation effect of group organizational
culture would be stronger in low participative

Journal of International Business Studies

 Structure, culture, and learning
1114
7
Low organizational group
culture
High organizational group
6.5 culture
Continuous improvement
6 fostered. This finding provides empirical evidence
and learning
5.5
5 the prevailing national culture (Hofstede, 1983;
4.5
4
Low organic structure High organic structure
Figure 3 Interaction of organic structure and organizational
group culture in low participative leadership cultures.
leadership cultures than in high participative
leadership cultures, was supported.
DISCUSSION AND CONCLUSION
Hofstede (1991, 1993) and others (Gelfand et al.,
2008; House et al., 2004; Metters et al., 2010; Shaw,
1990) have argued that many, if not most, manage-
ment theories are culturally constrained, and that
theories developed to explain behavior in the
United States or similar countries may not apply
in countries with different cultural values. Follow-
ing the same line of inquiry, this study is motivated
by two specific research questions: (1) Do national
cultural differences on the endorsement of partici-
pative leadership affect the relationship between
organic organizational structure and continuous
improvement and learning? (2) If so, does the
impact of national cultural values on participative
leadership endorsement vary in different organiza-
tional contexts? Our empirical findings based on
data collected from 266 manufacturing plants
located in nine countries and three industries
indicated that the strength of the relationship bet-
ween organic structure and continuous improve-
ment and learning differed, depending on the
extent to which the national culture endorsed
participative leadership. This finding is in line with
the culture-specific argument proposed in the exis-
ting cross-cultural literature (Child & Kieser, 1979;
House et al., 2004), which posits that observed
culture differences across nations would impede the
cross-national organizational applicability of man-
agerial practices, and that convergence among
organizational practices across nations would not
necessarily occur (Rungtusanatham, Forza, Koka,
Journal of International Business Studies
Xiaowen Huang et al
Salvador, & Nie, 2005). Our results suggest that
when national culture is aligned with the organiza-
tional structure (i.e., organic structure), continuous
improvement and learning will be effectively
supporting the notion that the effectiveness of
management practices depends, at least in part, on
Kull & Wacker, 2010).
We also proposed that organizational group
culture can compensate for a national culture that
is less supportive to organic structure in terms of
leadership expectations. Our analysis of the manu-
facturing plants located in Japan, South Korea, Italy
and Spain (i.e., the low endorsement of participa-
tive leadership group) found that the interaction
between group culture and organic structure had
a significant and positive effect on continuous
improvement and learning. This result indicated
that the presence of strong organizational group
culture can strengthen the relationship between
organic structure and continuous improvement
and learning when the national culture does not
endorse participative leadership. However, our
analysis of the manufacturing plants located in
Finland, Sweden, Austria, Germany and the United
States (i.e., the high endorsement of participative
leadership group) found the interaction effect of
group culture and organic structure on continuous
improvement and learning to be insignificant.
These results imply that the moderation effects of
organizational group culture may be limited to
national cultures that do not support participative
leadership. Hence, as long as the national cultures
endorse participative leadership philosophies,
organic structures will effectively contribute to the
cultivation of continuous improvement and learn-
ing, regardless of the existence of organizational
group cultures. This is found to be true of the plants
in Finland, Sweden, Austria, Germany and the
United States, where organic structure was also
found to have a significant and positive main effect
on continuous improvement and learning. We argue
that this result is a consequence of the syner-
gies between participative leadership behaviors
expected from and favored by lower-level employ-
ees, and the increased opportunities for vertical
communication and participative decision-making
embedded in organic structures. Conversely, when
supporting national cultures are absent, or at least
when the national culture does not endorse
participative leadership, as experienced by the
manufacturing plants in Japan, South Korea, Italy
 Structure, culture, and learning
and Spain, a strong organizational group culture
becomes critical to the positive relationship bet-
ween organic structures and continuous improve-
ment and learning.
The differences in the moderating effects of group
cultures found in this study further highlight the
profound impact of national cultures on employee
behaviors. Compared with organizational culture,
the values associated with national culture are more
deeply rooted, and consequently have stronger
effects on individual behaviors, while the effects
of organizational culture are secondary to those of
national culture. On the other hand, the finding of
a significant moderating effect for organizational
group culture when the national culture did not
endorse participative leadership indicates that
organizational culture may be a valuable alternative
venue for the facilitation of employee participa-
tion. It suggests that organizations do not necessa-
rily employ the same processes to take advantage of
the organic structure. When the prevailing national
culture does not support participative leadership,
the organization is unlikely to employ the vertical
communication necessary to support participative
leadership. Instead, the organization can use hori-
zontal communication and group decision-making
supported by a strong organizational group culture
to take advantage of the participative work envi-
ronment provided by organic structure.
We believe that this study makes at least two
significant contributions towards advancing the
literature. First, we contribute to the existing cross-
cultural literature by focusing on an emerging cul-
tural perspective: the culturally endorsed view of
leadership. In an era of increasing corporate globa-
lization, it is critical to understand how cultural
differences in expected social interactions between
leaders and subordinates affect business practices.
The framework was developed to facilitate deeper
understanding of how the traditionally studied
cultural values dimensions work in concert to influ-
ence management practices and employee behavior
in organizational settings. The GLOBE project found
that the CLT dimensions were empirically related to
cultural value dimensions. Our study continues to
indirectly test that CLT also has practical impli-
cations regarding workplace behavior and organi-
zational effectiveness. Overall, our results suggest
that the culturally endorsed leadership theory may
offer a rich framework to better understand cross-
cultural organizational behavior.
The second contribution comes from our effort to
investigate the relationship between organizational
Xiaowen Huang et al
1115
structure and a measure of organizational learning
in a model that takes into account both national
and organizational culture. National culture and
organizational culture can both be viewed as
components of an organization’s institutional capi-
tal, which are identified as the context surrounding
resources and resource strategies that enhances or
inhibits their optimal use (Oliver, 1997). The most
common view in institutional theory is that insti-
tutional forces contribute to homogeneity among
organizations (e.g., DiMaggio & Powell, 1983).
However, some institutional theorists argue that
while industry and societal context typically do
contribute to homogeneity, organization-level con-
text (such as organizational culture) may lead to
heterogeneity among organizations (Oliver, 1997;
Powell, 1991; Scott, 1991). Our study offers some
support to the latter view. Our analysis indi-
cates that organizations within the same societal
context (i.e., national cultural values that do not
support participative leadership) differ in their
capacity to utilize organic structure to foster
continuous improvement and learning, and that
the organization-level context (i.e., group culture)
contributes to heterogeneity observed in this study.
Our results are also valuable to practitioners.
The findings of moderating roles of national culture
highlight the importance of sensitivity to cul-
ture differences. We suggest two pathways to utilize
organic structure to cultivate continuous improve-
ment and learning: one through aligning organic
structure with national culture that endorses
participative leadership, and the other through
the processes and values associated with group
culture, which may provide alternative mechan-
isms to enhance the relationship between organic
structure and continuous improvement and learn-
ing in cases where the national culture does not
support participative leadership. The implication
is that the full realization of the relationship
between organizational structure and continuous
improvement and learning requires managers to
consider how the prevailing national culture may
influence the relationship, and, alternatively, the
extent to which the organizational culture may
enhance the relationship, in cases where the
national culture is less supportive of participative
leadership. Examination of the interaction graphs
indicates that the effects of organic structure on
continuous improvement and learning were mini-
mal in cases where national culture did not support
participative leadership, and where group organiza-
tional culture was low. Although further research is
Journal of International Business Studies
 Structure, culture, and learning
1116
needed to determine the generalizability of this
finding, our results suggest that managers in
countries whose values do not support participative
leadership need to consider carefully the extent to
which their organization has a strong group culture
in place, or has the potential to develop such a
culture in order to effectively use organic struc-
tures to promote continuous improvement and
learning.
Several limitations of this study should be noted.
First, because the data are cross-sectional, we
cannot make any definitive statements regarding
the causality of the included variables. Second, all
of the included variables were measured with
surveys that relied on perceptually based measures.
The potentially confounding effects of common
method bias were reduced to a large extent, both by
the use of multiple respondents for each measure
and by the fact that in no case did the same
respondent complete questionnaires that included
measures of both the dependent and independent
variables. Our measure of the dependent variable,
continuous improvement and learning, could argu-
ably be improved by including objective indicators
of the construct. Additionally, we included only
one criterion variable, so we cannot make any
statements regarding the extent to which our
results generalize to other theoretically related
outcomes, or to other aspects of organizational
learning. The extent to which the underlying logic
presented in our model can be extended to other
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1
We recognize that it could be argued that assigning
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Appendix A

Table A1 Respondents employed for study measures

Scale name Respondent classifications Number of respondents

per organization

Continuous improvement and learning Direct labor, quality manager, supervisor 5 to 12

Organizational structure
Employee multifunctionality Human resource manager, supervisor, plant superintendent 3 to 6
Flatness Human resource manager, supervisor, plant superintendent 3 to 6
Centralization Direct labor, human resource manager, supervisor 5 to 14
Group culture Direct labor, supervisor, plant superintendent 5 to 16

Appendix B

Table B1 Results of confirmatory factor analyses and inter-rater agreement

Measure Standardized Inter-rater

loading agreement
coefficient,
Rwg

Organic structure
Flatness 0.55 0.78
Our organizational structure is relatively flat 0.86
There are few levels in our organizational hierarchy 0.92
Decentralization 0.50 0.81
Even small matters have to be referred to someone higher up for a final answer (R) 0.87
Any decision I make has to have my boss’s approval (R) 0.84
There can be little action taken here until a supervisor approves a decision (R) 0.81
Multifunctional employees 0.87 0.91
Our employees receive training to perform multiple tasks 0.77
Employees at this plant learn how to perform a variety of tasks 0.91
The longer an employee has been at this plant, the more tasks they learn to perform 0.81

Group culture 0.80

Our supervisors encourage the people who work for them to work as a team 0.84
Our supervisors encourage the people who work for them to exchange opinions and ideas 0.80
Our supervisors frequently hold group meetings where the people who work for them 0.71
can really discuss things together
Our plant forms teams to solve problems 0.52

Continuous improvement and learning 0.91

We strive to continually improve all aspects of products and processes, rather than 0.68
taking a static approach
If we aren’t constantly improving and learning, our performance will suffer in the long term 0.49
Continuous improvement makes our performance a moving target, which is difficult for 0.66
competitors to attack
We believe that improvement of a process is never complete; there is always room for more 0.60
incremental improvement
Our organization is not a static entity, but engages in dynamically changing itself to better serve its 0.73
customers

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ABOUT THE AUTHORS
Xiaowen Huang is an Associate Professor at the
Farmer School of Business, Miami University, Ohio.
She received her PhD from the Operations and
Management Science Department, University of
Minnesota. Her research interest focuses on investi-
gating how companies can effectively deploy their
supply chains, technology, and operations strategies
to achieve competitive advantage in global settings.
Joseph C Rode is an Associate Professor at the
Farmer School of Business, Miami University, Ohio.
He received his PhD in organizational behavior
and human resources from Indiana University,
Accepted by David C. Thomas, Area Editor, 15 July 2011. This paper has been with the authors for three revisions.
Journal of International Business Studies
Xiaowen Huang et al
Bloomington. His research interests include relation-
ships between work and nonwork domains, attitudes
and emotions, transformational leadership, and both
organizational and national culture.
Roger G Schroeder is the Donaldson Chair in
Operations Management Emeritus at the University
of Minnesota. He is also Professor of Operations
Management at Tilburg University, the Netherlands.
His research interests are in manufacturing strategy,
quality management and new product development.
He is a Fellow of the Decision Sciences Institute
and of the Production and Operations Management
Society.