Asia-Pacific Journal of Business Administration

Organizational culture profile of Malaysian high-tech industries

M Muzamil Naqshbandi Sharan Kaur Rashmi Sehgal Indra Devi Subramaniam

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APJBA
7,1

Organizational culture profile of

Malaysian high-tech industries
M. Muzamil Naqshbandi and Sharan Kaur
Faculty of Business and Accountancy, University of Malaya,
Kuala Lumpur, Malaysia

2
Received 30 August 2013
Revised 27 December 2013
Accepted 3 February 2014

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

Indra Devi Subramaniam

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Graduate School of Management, Multimedia University, Cyberjaya, Malaysia

Abstract
Purpose The role of organizational culture in determining success or failure of firms stands proven
beyond doubt in numerous studies. The purpose of this paper is to examine organizational culture of
the Malaysian high-tech sector and highlights the organizational culture dimensions most and least
dominant in this sector. The study also examines differences with respect to organizational culture
across the high-tech industries and different ownership types.
Design/methodology/approach Questionnaire survey method is used to collect the data from
middle and top managers working in Malaysian high-tech industries.
Findings Five dimensions of organizational culture emerge in this study. Results indicate that
harmony and social responsibility are the most and least dominant dimensions of organizational
culture respectively. Significant differences are found in organizational culture across industries and
ownership types.
Originality/value While organizational culture seems to be a fairly well-researched topic in
Malaysia, there seems to be a dearth of studies investigating the issue of culture prevalent in the
high-tech industries in Malaysia; this despite the paramount contribution of the high-tech industries to
the Malaysian economy. This study identifies the culture of Malaysian high-tech industries, examines
what cultural dimensions they focus on and do not, and compares organizational culture differences
across industries and ownership structures.
Keywords Malaysia, Organizational culture, High-tech industry
Paper type Research paper

Asia-Pacific Journal of Business

Administration
Vol. 7 No. 1, 2015
pp. 2-19
Emerald Group Publishing Limited
1757-4323
DOI 10.1108/APJBA-08-2013-0088

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

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organizations address several issues like those of external adaptation and integration
(Pool, 2000), and other difficulties and challenges (Quick, 1992).
However, while many companies today recognize that culture can be used for
competitive advantage, emphasis needs to be laid on the importance of having
a culture that fits with the demands of the companys environment. A companys
performance may benefit from culture to the extent that the shared values are proper
for the company in question. Having a culture that encourages innovativeness and
adaptability, for instance, will support the performance of a company in the
high-tech industry. Therefore, having the right culture may be a competitive
advantage for an organization while having the wrong culture may lead to poor
performance and organizational failure. Many high tech companies like Apple Inc.
have been able to survive despite intense competition; such companies have ventured
into new and profitable markets by leveraging their culture of innovation toward
product and internal process excellence.
In the Malaysian context, studies show that organizational culture influences
several facets of firms such as financial performance (Rashid et al., 2003; Yusoff, 2011),
degree of integration and value creation in strategic alliances (Sambasivan and Yen,
2010), attitudes towards organizational change (Rashid et al., 2004), innovation
(Asmawi and Mohan, 2010) and many more (Wang and Abdul-Rahman, 2010;
Yiing and Ahmad, 2009). While organizational culture seems to be a fairly
well-researched topic in Malaysia, there seems to be a dearth of studies investigating
the issue of culture prevalent in the high-tech industries in Malaysia; this despite
the paramount contribution of the high-tech industries to the Malaysian economy.
Motivated thus, this paper aims to:
(1) examine organizational culture in the Malaysian high-tech Industry;
(2) examine the differences between organizational culture among the four
high-tech industries that form the high-tech sector in Malaysia; and
(3) examine the differences in organizational culture under different ownership
structure.
This paper contributes to the body of knowledge by enhancing our understanding of
what organizational culture dimensions are perceived as favorable by the high-tech
industries in question. The data set for this study comes from Malaysia. Malaysia is
one of the success stories of nations that has moved from a low to middle income
nation over the years through economic and social progress. Going forward,
the Malaysian government aims to achieve a high-income nation status by 2020.
To take the country to a high-income status, the economic machineries of the past
have to be changed to accommodate a more aggressive environment that
increasingly intensifies the competition for markets, capital and talent. As such,
the government of Malaysia has drawn up a comprehensive effort called the
Economic Transformation Programme (ETP) that aims to transform Malaysia into
a high-income nation by 2020 (PEMANDU, 2011). Moreover, Malaysia is poised to
transform to a major player in biotechnology, medical device manufacturing,
semiconductors, solar power and value-added tech production (Area Development
Online). Malaysia has attracted renowned high-tech players like Intel, AIC
Semiconductor, BASF electronic Materials and others. In addition, Malaysias
high-tech parks have been set up that are conducive for high-tech industries to
thrive. In view of this, we choose the Malaysian high-tech sector for this study.

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As Malaysia moves towards becoming a fully developed country, its economy will
become more knowledge-based and technology-driven. There is therefore a need to
identify the dimensions of organizational culture that would be able to support
a knowledge- and technology-driven economy and enable it to compete with other
developed countries.
The finding of this study, when contrasted and compared against what is known
about the organizational culture of high-tech industries of the developed countries in
the region, will highlight whether Malaysian high-tech firms have organizational
culture similar to that of the high-tech industries in the region or is it unique in itself.
In addition, to the best of researchers knowledge, this study is the first in the
Malaysian context to validate the Organizational Culture Instrument developed by
Tsui et al. (2006) for the Chinese context. Doing this is interesting and makes sense
because ethnic Chinese form around a quarter of Malaysias 28 million population while
majority of the businesses are owned by them.
2. Organizational culture
Culture is a complex issue. It is an effective control mechanism dictating employee
behavior, thus making it a powerful way of controlling and managing
employee behaviors. The earliest significant formal writing on organizational culture
can be traced to Pettigrew (1979) who contended that people create, shape, change and
manage the culture according to their beliefs, values, knowledge and needs. Since
Pettigrews (1979) work on organizational culture, a large number of studies have piled
up, defining and explaining the concept of organizational culture in different ways.
Organizational culture has thus been defined differently by a multitude of scholars
(Denison, 1990; Hofstede et al., 1990; Keesing, 1974; Ott, 1989; Schein, 1990, 1981).
In this study, we consider an oft-cited definition of organizational culture given by
Schein (1992) who defined organizational culture as: a pattern of basic assumptions
that the group learned as it solved its problems of external adaptation and internal
integration, that has worked well enough to be considered valid and, therefore, to be
taught to new members as the correct way to perceive, think, and feel in relation
to those problems.
This definition focuses on external adaptation as well as internal integration
aspects of a firms culture. Using the same definition of organizational culture,
Tsui et al. (2006) conducted an extensive study of state-owned, foreign-invested
companies and private domestic firms in the Chinese context and identified five
cultural values namely: employee development, harmony, customer orientation,
social responsibility and innovation. Based on scores for these culture values
obtained in their study and comparing with existing models, the authors identified
four configurations of culture profiles: Highly Integrative Culture, Market-Oriented
Culture, Moderately Integrative Culture and Hierarchy Culture. The five culture
values identified in this study relate to both internal integration and external
adaptation functions of the firms. A firm with a Highly Integrative Culture
pays equally high attention to employee development and harmony (facilitating
thereby internal integration) and customer orientation, social responsibility and
innovation (facilitating external adaptation). Consistent with Schein (1992),
according to this model firms emphasizing dimensions that contribute to these
two functions (internal integrations and external adaptability) are more effective
in terms of managers perception of firm performance, organizational support
and commitment to the firm.

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Dimensions of organizational culture

Organizational culture has been evaluated along many dimensions and this has
resulted in models and theories which are conceptually different but fundamentally
similar (Yiing and Ahmad, 2009). Several typologies have thus been developed to
understand the concept of organizational culture. In the Malaysian context, researchers
have used several typologies/dimensions of organizational culture. For instance,
Rashid, et al. (2004) used Goffee and Jones (1998) framework, Yiing and Ahmad (2009)
used Wallachs (1983) typology, while Abdullah (1992) used the famous typology by
Hofstede (1980), Sambasivan and Yen (2010) used Organizational Culture Assessment
Instrument (OCAI) developed by Quinn and Rohrbaugh (1983) while the instrument
used by Asmawi and Mohan (2010) was adapted from Dennison Organizational
Culture Survey (Denison and Neale, 1996) and Innovation Mini Audit (Wycoff and
Hattori, 2004).
As mentioned before, this study uses the definition of organizational culture as
given by Schein (1992) and uses the dimensions and measurements of organizational
culture, based on this definition, developed by Tsui et al. (2006). Several reasons exist
for choosing the dimensions and measurements given by Tsui et al. (2006).
First, high-tech industries function in an environment characterized by three
types of uncertainty: market uncertainty, technology uncertainty, and competitive
volatility. An organizational culture which supports employee development,
harmony, customer orientation, social responsibility and innovation would be
required to develop the needed competencies, attitudes and work behavior among
the employees. Schein (1992) recognized organizational diversity according to the
occupational profiles of workers. Thus organizational culture that would contribute
to positive organization outcomes must have dimensions that would support the
core business of the organization. This suggests that the typology used to
measure the organizational culture should be able to capture industry-related
organizational culture.
Second, the framework by Tsui et al. (2006) is quite recent as compared to other older
models found in literature and this framework captures cultural values that lead to
both internal integration and external adaptability. It is apparent that organizations
that score high on all dimensions of culture in Tsui et al.s (2006) instrument would
have integrative culture and those that score low would have hierarchical culture. In
this way, culture of organizations can be described on a continuum from integrative
to hierarchical.
Third, the description of Malaysian national culture and its implications suggest
that there is compatibility between it and organizational culture typology of Tsui
et al. (2006). Malaysian society being collectivist would emphasize building skills,
becoming masters of something, work for intrinsic rewards, value harmony and
concern for community. These characteristics would support employee development,
customer orientation, harmony and social responsibility. Being low on uncertainty
avoidance, Malaysians are characterized by change and risk taking, both of which are
necessary for innovation, another dimension of organizational culture proposed
by Tsui et al. (2006). Therefore this makes the case for selecting the Tsui et al.
(2006) typology of organizational culture for measuring the culture of high-tech sector
in Malaysia.
In addition to these factors, Tsui et al. (2006) developed the cultural dimensions
scale, based on the seminal work of Schein (1992), using both a qualitative and a
quantitative approach. A two-phase design helps to ensure methodological rigor and

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culture profile

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APJBA
7,1

capitalizes on the unique strengths of the two traditionally separate research

orientations (Lee, 1999). Lastly, to our best knowledge, there is no study done in the
Malaysian context using Tsui et al.s (2006) framework. Therefore, besides helping
answer the explicit objectives of this study, this research exercise will as well validate
Tsui et al.s (2006) instrument in the Malaysian business context.

Integrative and hierarchical organizational cultures

Organizational cultures have a boundary defining role, with different organizations
having different cultures that are reflected in different structures and systems
(Handy, 1976). Two terms are widely used to describe organizational culture:
integrative and hierarchical. Integrative culture is used to refer to organizations that
have widely shared and strongly held values that address the firms needs of internal
integration and external adaptation (Schein, 1992). Hierarchical culture is used to refer
to organizations with a low level of emphasis on these values (Cameron and Freeman,
1991). Hierarchical culture organizations achieve goals through formal rules and close
supervision rather than through shared values.
Integrative culture organizations emphasize the values of caring for employees,
customers, and the society. They emphasize high standards for performance,
innovation and responsiveness to changes in the external environment (OReilly et al.,
1991; Tsui et al., 2006). Research by Kerr and Slocum (1987) and Sheridan (1992) has
shown that organizations that respect its members, value teamwork and security are
able to foster commitment and loyalty among employees. According to Denison and
Mishra (1995) organizations that care for their customers and are socially responsible
tend to be more flexible in dealing with changes in the environment and directing
employees toward fulfilling their objectives. Integrative culture organizations unite
employees by promoting their aspirations to succeed, instilling a purpose for
work, and strengthening their involvement with the organization (Chatman and
Jehn, 1994). Employees interests are synergized in integrative cultures through
emphasis on trust, long-term support, and investment in employees which are
characteristic of social exchange relationship. Delayed gratification is accepted
because the employees trust the organization, and are willing to transcend
self-interest in favor of pursuing common goals. Employees in integrative culture
organizations reciprocate with high levels of affective commitment, task performance,
and citizenship behaviors.
Hierarchical culture on the other hand does not emphasize such cultural values
when dealing with customers and society (Cameron and Freeman, 1991). There is
very little participation in decision making and employees are expected to follow
standard operating procedures and rules. Hierarchical culture tends to neglect
employees psychological needs. Therefore in hierarchical culture organizations,
employees identification with and psychological attachment to the organization are
weak. They tend to be utilitarian in their involvement with the organization. Employees
have a negative perception of their organization in terms of trust, respect and
investment. They also do not expect repayment from the organization for their support
and trust. The employees in hierarchical organizations tend to be calculative and would
negotiate with their employer for rewards. They would want immediate gratification
for their services rendered and pursue self-interest without caring about collective
goals. In these circumstances, the employees are psychologically detached from the
organization. They are unwilling to contribute much beyond basic task performance
and exhibit low organizational citizenship behavior.

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Organizational culture and industry type

According to Chatman (1991) organizational culture could vary across firms even
among firms operating in homogenous industries. Pennings and Gresov (1986) add that
organizations have clear differences in culture based on industry norms. Therefore
features present in the industry an organization operates in, such as the technology
used and the rate of growth, may also affect the uniqueness of an organizations
culture. In this backdrop, in this study we expect industry characteristics to have an
effect on organizational culture. Barney (1986) says that for organizational culture to be
a source of competitive advantage, it must be valuable, rare and not imitable. Therefore
it is important to study the unique organizational culture that can give competitive
advantage to firms in a particular industry and to determine whether it differs across
firms in the same industry.
Organizational culture and firm ownership
Since cultures are kept alive through selection, socialization and actions of top
management, we would expect the organizational culture of the surveyed companies to
be influenced by the founders or owners who in this case are mainly of Chinese ethnic
origin. We would then expect the result of this study to mirror that of Tsui et al. (2006)
who studied Chinese employees in companies in China. Many studies have shown that
organizational culture is influenced by the dominant national and societal culture of the
physical location in which the company is operating (Beruvides, 2001; Enz, 1986).
Hofstede (1980) explained this phenomenon in his study on the Dimensions of National
Culture. From this perspective, it would be interesting to find out whether the unique
Malaysian national culture created by the multiracial society of which the Malaysian
Chinese are a part, has any influence on the organizational culture of the companies.
3. Methodology
Research design
A cross-section field survey method was used to conduct this study.
Population and sampling
The target population of this study were the middle and top managers working in the
Malaysian manufacturing firms operating in the four industries classified by OECD
(1997) as high-tech: Aerospace, Computers and office machinery, Electronics and
communication and Pharmaceuticals. Two sample frames were used: the first one
was taken from Malaysian Manufacturers Directory (2011) for Computers and
Office Machinery, Electronics and Communication and Pharmaceuticals industries. As
Aerospace firms were not indexed in the Malaysian Manufacturers Directory (2011),
the second sampling frame was retrieved from the Aerospace Industry Report (AIR)
Online Database which is run by the Malaysian Aerospace Council (MAC). In total,
900 questionnaires were distributed by email and in person; 366 were returned. After
data coding and entry, 27 responses were found to have more than 10 percent missing
values or outliers and were therefore discarded (Hair et al., 2010). Finally 339 useable
responses were used for data analysis. This represents a response rate of 37.70 percent.
Measures, reliability and pilot-test
The research instrument was a structured questionnaire. Measures for organizational
culture were adapted from Tsui et al. (2006). Using 23 items, the scale by Tsui et al. (2006)

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measures organizational culture on five dimensions: employee development (five items),

harmony (five items), customer orientation (five items), social responsibility (four items)
and innovation (four items). To reduce common method bias (CMB) and common method
variance (CMV), four marker variables were inserted and the items were jumbled up
(Conway and Lance, 2010). All the items were anchored on a five-point Likert scale
ranging from strongly disagree to strongly agree. To ensure reliability of the scale, a
pilot test was conducted using Masters students with previous work experience.
Questionnaires were distributed among students from three faculties of the University of
Malaya namely: Faculty of Computer Sciences, Faculty of Engineering and Faculty of
Business and Accountancy. Constraints were applied and only the post-graduate
students with previous work experience were targeted. From the Faculty of Business and
Accountancy, only the MBA students were administered the questionnaire. Most of these
MBA students were studying part-time and working full-time at several management
positions. MBA students have been used successfully for pretests for firm level research
in many studies (cf. Atuahene-Gima and Murray, 2004; Frels et al., 2003). Frels et al. (2003)
followed a similar path and subjected their initial questionnaire to IT professionals
enrolled in an executive education class to improve reliability of their instrument.
Cronbachs was used to measure the internal consistency and it was found to be 0.711,
thus confirming acceptable reliability of the scale (Hair et al., 2010).
4. Data analysis
Profile of the respondents
Roughly a proportional number of responses were collected from all the four industries
surveyed. Most of the respondents (54.9 percent) occupied top management positions
while 45.1 percent were middle managers, indicating that they were in a good position to
perceive and describe the emphasis of their company values relating to internal
integration and external adaptation of their firms (Tsui et al., 2006). All the respondents
had served their current firms for more than five years and thus are expected to be
familiar with the culture of their organization quite well. The firms served in the local,
regional and global markets with most of the firms (42.2 percent) serving the global
market. An overwhelming majority (93.5 percent) of the firms had been operating for
more than ten years and thus can be considered quite established. Around 85 percent
of the firms had more than 100 employees while around 84 percent earned revenue of
more than $300,000 (a million Ringgit Malaysia (RM)). All these statistics indicate
that all the four surveyed industries are well represented and that the respondents
were qualified enough to respond to the questions about the organizational culture
of their firms which, judging by the firm age, revenue and number of employees,
were quite established. These descriptive statistics of the demographic variables are
presented below in Table I.
Exploratory factor analysis
To gain a better understanding of the underlying structure of the data (Pitt and
Jeantrout, 1994) and prepare ground for answering the objectives of this study, we
conducted exploratory factor analysis (EFA) using principal component analysis as the
extraction method and varimax with Kaiser normalization as the rotation method to
reduce the 23 items measuring organizational culture into a smaller number of factors.
Appropriateness of factor analysis was determined by examining the Kaiser-Meyer-Olkin
(KMO) measure of sampling adequacy (0.897) and the Bartletts test of sphericity (sig at
0.000). Both tests indicate suitability of performing factor analysis. As shown in Table II,

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Categories

Cumulative (%)

Type of industry
Aerospace
Computers and Office Machinery
Electronics and Communication
Pharmaceuticals

73
87
76
103

21.5
25.7
22.4
30.4

21.5
47.2
69.6
100

Respondent position
Middle Management
Top Management

153
186

45.1
54.9

45.1
100

Respondent years in firm

5-10 years
11-15 years
16-20 years
Above 20 years

217
95
24
03

64.0
28.0
7.1
0.9

64.0
9.0
99.1
100

Firms market
Local/National
Regional
Global

88
108
143

26.0
31.9
42.2

26.0
57.8
100

Firm ownership
Publicly owned
Privately owned
State owned
Foreign ownership
Mixed ownership/ Joint venture

26
161
16
110
26

7.7
47.5
4.7
32.4
7.7

7.7
55.2
59.9
92.3
100.0

Company age
1-10 years
11-20 years
21-30 years
31-40 years
Above 50 years

22
153
87
72
05

6.5
45.1
25.7
21.2
1.5

6.5
51.6
77.3
98.5
100.0

Number of employees
Less than 100
101-500
501-1,000
1,001-5,000
Above 5,000

52
137
121
26
03

15.3
40.4
35.7
7.7
0.9

15.3
55.8
91.4
99.1
100

Annual revenue (RM)

Less than 200,000
200,000-500,000
500,000-1 mil
1 mil-5 mil
5 mil-10 mil
10 mil-25 mil
25 mil-above

6
13
35
66
24
138
57

1.8
3.8
10.3
19.5
7.1
40.7
16.8

1.8
5.6
15.9
35.4
42.5
83.2
100.0

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

Organizational
culture profile

Table I.
Showing
characteristics
of the sample

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10

Table II.
EFA of
organizational
culture

Items

Communalities
Extraction

Factors
3

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

total 23 items had poor factor loadings. These four items, one each from employee
development, harmony, customer orientation and social responsibility, were removed from
further analysis.
Confirmatory factor analysis
Guided by the results of EFA and to confirm the above results, we conduct a
confirmatory factor analysis (CFA) by specifying a measurement model. In line with
Hair et al. (2010, p. 644), model fit was assessed using 2 values and degrees of
freedom, the CFI and the RMSEA. The initial model fit for the measurement model
including all the 23 items of organizational culture showed unreasonable fit: CMIN/
DF 2.910; CFI 0.888; RMSEA 0.075. Therefore the model was modified and four
items namely OC.EmpDev.1, OC.Harmony.1, OC.CustOrient.4 and OC.SocRes.1 were
dropped. As Table III below shows, after removing these items from the measurement
model, the new model fitted the data better: CMIN/DF 2.571; CFI 0.931;
RMSEA 0.068.
Organizational culture dimensions
The first objective of this study is to examine organizational culture in general
in Malaysian high-tech industries. Thus the dimensions and the extent to which they
are focused by the Malaysian high-tech sector were examined. This was done by

Construct

Items

Initial model fit

Final model fit

OC.EmpDev.1a
CMIN/
CMIN/
DF 2.910
DF 2.571
OC.EmpDev.2
CFI 0.888
CFI 0.931
OC.EmpDev.3
RMSEA 0.075 RMSEA 0.068
OC.EmpDev.4
OC.EmpDev.5
Harmony
OC.Harmony.1a
OC.Harmony.2
OC.Harmony.3
OC.Harmony.4
OC.Harmony.5
Customer orientation OC.CustOrient.1
OC.CustOrient.2
OC.CustOrient.3
OC.CustOrient.4a
OC.CustOrient.5
Social responsibility
OC.SocRes.1a
OC.SocRes.2
OC.SocRes.3
OC.SocRes.4
Innovation
OC.Innov.1
OC.Innov.2
OC.Innov.3
OC.Innov.4
Note: aIndicates the items deleted from the final model

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Dimension
Employee
development

Organizational
culture profile

11

Table III.
Initial and final
model fit for
organizational
culture

calculating means for all the dimensions of organizational culture. Table IV and
Figure 1 below show that maintaining Harmony scores as the most dominant cultural
dimension in Malaysian high-tech organizations. employee development comes second
followed by innovation, customer orientation and social responsibility. These are
interesting results and are discussed in a later section.
Organization culture dimensions and industry type
A part of the first objective of this study is to examine the industry differences with
respect to organizational culture in general. To answer this objective, we conduct a
one-way ANOVA test to test for any significant differences between the four high-tech
industries with respect to organizational culture. A composite variable for
organizational culture is calculated by averaging the 19 items that had acceptable
factor loading in the EFA and CFA. A significant effect of industry type on
organizational culture at p o 0.01 level was found (F(3, 335) 17.43, p 0.00). Since

Dimension
Employee development
Harmony
Customer orientation
Social responsibility
Innovation

Mean

Rank

SD

339
339
339
339
339

4.29
4.33
4.21
4.18
4.27

2
1
4
5
3

0.61
0.60
0.52
0.72
0.67

Table IV.
Mean scores for
organizational
culture dimensions

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12

significant results were found for organizational culture with respect to industry type,
post hoc comparisons are necessitated (Table V).
Post-hoc comparisons using the Tukey HSD test indicated that at p o 0.01 level the
mean score for the Aerospace industry (M 4.09, SD 0.35) was significantly different
from the Computer and Office Machinery industry (M 4.53, SD 0.34) and
Pharmaceutical industry (M 4.25, SD 0.47). Besides the mean score for Computer
and Office Machinery industry was significantly different from that of Electronics and
Communication industry (M 4.12, SD 0.55) while the mean score for the
Pharmaceuticals industry was significantly different from that of Computer and
Office Machinery industry. Taken together, these results suggest that industry type
does have a significant effect on organizational culture. In other words, our results
suggest that the Computers and office machinery industry focuses most on all the
dimensions of organizational culture followed by Pharmaceuticals, Electronics and
communications and Aerospace industries.
Cluster analysis
To make further sense of organizational culture of high-tech firms in Malaysia, we
perform cluster analysis on the five dimensions of organizational culture obtained in
EFA and confirmed in CFA. This will help in extracting easier-to-understand
conclusions about the data. Hence cluster analysis is performed using the K-means
procedure on the five dimensions of organizational culture. Results of three-cluster,
four-cluster and five-cluster solutions were compared and examined. A three-cluster
solution was found to be most interpretable. This three-cluster solution was also very
close to the past studies including the one by Tsui et al. (2006). The first cluster had
high value on all the five dimensions of organizational culture (i.e. both internal
integration and external adaptation). This cluster, in line with past studies, was named

Most and least focused Organizational Culture dimensions

4.35
4.3

Figure 1.
Most and least
focused
organizational
culture dimensions
in Malaysian
high-tech sector

4.25
4.2
4.15
4.1
Employee
Development

Type of Industry

Table V.
Overall results of
ANOVA

Aerospace
73
Computers
87
Electronics
76
Pharmaceuticals
103
Note: *Significant at p 0.01

Harmony

Customer
Orientation

Social
Responsibility

Innovation

Mean

SD

F value (overall)

Significance (overall)

4.09
4.53
4.12
4.25

0.35
0.34
0.55
0.47

17.43

0.00*

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Highly Integrative Culture to describe firms high focus on both internal integration
and external adaptation. The second cluster, with good score on all dimensions (but less
than it was in case of Highly Integrative Culture) was named Moderately Integrative
Culture. The third cluster, with low score on all the five dimensions of organizational
culture was named Hierarchy Culture, again deriving the phrase from past studies. As
can be seen in Table VI below, the three culture types classify the surveyed firms in this
study into three categories: those with Highly Integrative Culture (169 firms; 49.85
percent), Moderately Integrative Culture (121 firms; 35.70 percent) and Hierarchy
Culture (49 firms; 14.45 percent).
Organizational culture type and industry type
The second objective of this study is to examine the differences with respect to
organizational culture in firms operating in the four Malaysian high-tech industries.
Therefore we performed a 2 test to examine these differences. Statistically significant
differences were found in the organizational culture of the four industries surveyed, 2
(6, n 339) 49.59 p o 0.01. The Computer and Office Machinery industry, the
Electronics and Communications industry, and the Pharmaceuticals industry were
more likely to have Highly Integrative Culture, while the Aerospace industry was more
likely to have Moderately Integrative Culture.
In the Aerospace industry, 60.3 percent of the firms had Moderately Integrative
Culture while 30.1 and 9.6 percent had Highly Integrative Culture and Hierarchy
Culture respectively. As opposed to the Aerospace industry, in the Computers and
Office Machinery industry 70.1 percent of the firms had Highly Integrative Culture
while 26.4 and 3.4 percent had Moderately Integrative Culture and Hierarchy
Culture. Somewhat similar to this, in the Electronics and Communications industry 43.4
percent of the firms had Highly Integrative Culture while 27.6 and 28.9 percent of the
firms had Moderately Integrative Culture and Hierarchy Culture respectively. Lastly
and quite similar to the Computers and Office Machinery industry and Electronics
and Communications industry, in the Pharmaceuticals industry 51.5 percent of the
firms had Highly Integrative Culture while 32 and 16.5 percent had Moderately
Integrative Culture and Hierarchy Culture respectively.
Organization culture type and firm ownership type
To answer the third objective of this paper, that is to examine whether any differences
exist with respect to organizational culture under different ownership types, we performed
a 2 test. The relation between organizational culture and ownership types was found to
be significant, 2 (8, n 339) 29.53 po0.01. The privately owned firms, those that had
foreign ownership, and the firms with mixed ownership were more likely to have highly
integrative culture, while the publicly owned and the state-owned firms were more likely
to have moderately integrative culture. These results are presented in Table VI above.
Among the privately owned firms, 58.4 percent were found to have Highly
Integrative Culture, while 29.8 and 11.8 percent had Moderately Integrative Culture and
Hierarchy Culture respectively. As against this, most of the publically owned firms
(61.5 percent) had Moderately Integrative Culture while 26.9 and 11.5 percent had
Hierarchy Culture and Highly Integrative Culture respectively. Most of the state-owned
firms (37.5 percent) had Moderately Integrative Culture, while 31.2 percent had Highly
Integrative Culture and 31.2 percent had Hierarchy Culture. In addition, most of the
firms with foreign ownership (51.8 percent) had Highly Integrative Culture while 38.2

Organizational
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13

Table VI.
Organizational
culture dimensions
under different
organizational
culture types
4.72
4.75
4.47
4.55
4.75
n
3
94
5
57
10
n
22
61
33
53
169

0.37
0.34
0.36
0.46
0.35
%
11.5
58.4
31.2
51.8
38.5
%
30.1
70.1
43.4
51.5
49.85

169
169
169
169
169

3.94
4.03
4.06
4.18
3.89
n
16
48
6
42
9
n
44
23
21
33
121

0.43
0.43
0.50
0.41
0.56
%
61.5
29.8
37.5
38.2
34.6
%
60.3
26.4
27.6
32.0
35.7

121
121
121
121
121

Moderately integrative culture

Mean
SD
n
3.68
3.63
3.70
2.90
3.58
n
7
19
5
11
7
n
7.0
3.0
22
17
49

0.59
0.60
0.54
0.56
0.51
%
26.9
11.8
31.2
10
26.9
%
9.6
3.4
28.9
16.5
14.45

49
49
49
49
49

Hierarchy culture
Mean
SD
n

14

Organizational culture dimensions

Employee development
Harmony
Customer orientation
Social responsibility
Innovation
Firm ownership
Publically owned
Privately owned
State owned
Foreign ownership
Mixed ownership/JV
Industry type
Aerospace
Computers and office machinery
Electronics and communications
Pharmaceuticals
Total
Note: *p o 0.01

Highly integrative culture

Mean
SD
n

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168.39*
196.96*
70.02*
220.64*
209.85*
Total
26
161
16
110
26
Total
73
87
76
103
339

F-test

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percent had Moderately Integrative Culture and only 10 percent had Hierarchy Culture.
Most of the firms with mixed ownership (38.5 percent) had Highly Integrative
Culture while 34.6 percent had Moderately Integrative Culture and 26.9 percent had
Hierarchy Culture.
5. Discussion and conclusions
This paper set out to achieve three objectives. The first objective was to examine
the cultural orientation of firms operating in four high-tech industries in Malaysia.
To achieve this objective, the instrument developed by Tsui et al. (2006) for the
Chinese context was used for the first time in Malaysia. It emerged that organizational
culture in Malaysian firms operating in the high-tech industry has five dimensions:
employee development, harmony, customer orientation, social responsibility,
innovation. This shows that the organization culture dimensions in Malaysian
high-tech industry, measured using the instrument developed originally for the Chinese
context by Tsui et al. (2006), emerge the same way as for organizations in China. This
may be due to the cultural closeness of Malaysia with China and the historical
exchanges between the two countries; in addition to the fact that quite a significant
number of businesses in Malaysia are run and owned by ethnic Chinese.
In this study we found Harmony to be the most prevalent dimension of
organizational culture in Malaysian high-tech industries while social responsibility was
the least focused one. Harmony being the most prevalent dimension of organizational
culture is understandable and can be attributed to what has been called the
Asian-ness of the Malaysian national culture. Chiok et al. (2012) highlight harmony
as a part of Malaysian culture suggesting that the young Malaysians are optimistic
about the emerging Malaysian culture and are adapting well to the cultural elements
of other ethnic groups despite some differences in opinion. Being a multi-racial country,
the three major ethnic groups in Malaysia interact, deal and do business with each
other on a daily basis. Promotion of a harmonious culture in such a situation is
therefore not only looked upon favorably but promoted as well. This becomes evident
by looking at the current Malaysian National Culture Policy, 1Malaysia, which aims
to foster harmony and unity among all the Malaysians irrespective of their racial
background (1Malaysia.com).
Moreover, in this study three culture types emerged: highly integrative culture,
moderately integrative culture and hierarchy culture. Indicating a positive trend,
most of the Malaysian firms were found to have highly integrative culture while only a
small number had hierarchy culture. While having a highly integrative culture can
be a panacea for the many issues facing businesses today more so in the highly
dynamic high-tech industry it is encouraging to see the Malaysian high-tech firms to
either have highly integrative culture or moderately integrative culture. However quite
a few firms (28.9 percent) in the electronics and communications industry were found to
have hierarchy culture. This points towards the areas of improvement whereby the
firms must make an effort to change their organizational culture and make it more
integrative to respond better to the dynamic market trends and needs.
This study also examined the differences between organizational culture among
four high-tech industries in Malaysia. Significant differences were found with highly
integrative culture being predominant in the computer and office machinery industry,
electronics and communication industry and the pharmaceuticals industry while
moderately integrative culture was found to be predominant in the aerospace industry.
This has implications for the aerospace industry in that this industry in Malaysia

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should make efforts to modify its organizational culture to become more integrative.
Organizational culture plays a critical role as it is a critical means for firms to integrate
internal processes and to adapt to the external environment (Denison and Mishra,
1995). The firms with integrative cultures widely share and strongly hold values that
address the firms needs of internal integration and external adaptation, thereby
enhancing firm performance. Besides on a positive note, hierarchy culture which lays
a low level of emphasis on the values of internal integration and eternal adaptation
(Cameron and Freeman, 1991) was not found to be predominant in any of the four
high-tech industries surveyed for this study.
We also examined the differences in organizational culture under different
ownership structures. Again significant differences were found; with the privately
owned firms, those with foreign ownership, and the firms with mixed ownership more
likely to have highly integrative culture while the publicly owned and the state-owned
firms were more likely to have moderately integrative culture. While hierarchy culture
was not found to be predominant under any ownership structure, 31.2 percent of the
state-owned firms and 26.9 percent of the publicly owned firms and 26.9 percent of the
firms with mixed ownership were found to have hierarchy culture. It is encouraging
again to know that predominantly firms under all the ownership structures either have
highly integrative culture or moderately integrative culture. This finding however also
points towards the scope, particularly for the publicly owned, the state-owned and
the mixed ownership firms to adopt a highly integrative culture. This can be well
expected to boost their performance and help them compete with their counterparts
operating under other ownership structures (Gordon, 1985).
6. Limitations
Malaysia is not a homogeneous country (Lim, 2001). The Malaysian population is made
of three major ethnic groups: Malays, Chinese and Indians. According to Fontaine and
Richardson (2003) each ethnic group in Malaysia tries to cooperate and compete with
each other for economic, social and political reasons. In this study, we did not examine
the differences between ethnicities with respect to organizational culture. Doing so
could have helped in understanding if cultural differences exist between Malaysian
organizations run and owned by different races. Furthermore, the employees of the
surveyed firms also come from the three major ethnic groups in Malaysia. By ignoring
this factor, there is a possibility that the richness of the relationships within ethnic
groups has been ignored (Asma, 2001). This limitation is however mitigated as Asma
and Lim (2001) reported that the three ethnicities in Malaysia differed significantly on
only one construct that is religiosity. From there stems another limitation of this study,
that is not taking into consideration the dimensions of religion which is quite important
in the Malaysian workplace (Asma and Lim, 2001). In addition, it must be noted that
there are low numbers of firms in some firm ownership types such as publically owned
(26), state-owned (16) and mixed-ownership (26). Hence the results of this study need to
be interpreted with caution.
7. Future research
This study examined organizational culture in Malaysian high-tech sector using the
instrument developed by Tsui et al. (2006). First, future research can look at this sector
by using other instruments. Second, the factor of ethnicity should be incorporated in
future studies. Third, future research can consider the religiosity dimension of culture
in the Malaysian workplace.

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About the authors
Dr M. Muzamil Naqshbandi is a Post-Doctoral Research Fellow in the Faculty of Business and
Accountancy, the University of Malaya. His research interests are organizational culture, open
innovation, business strategy and research methods. He has published his work in many
international journals. Dr M. Muzamil Naqshbandi is the corresponding author and can be
contacted at: virkul@gmail.com
Dr Sharan Kaur is Deputy Dean (Research) in the Faculty of Business and Accountancy, the
University of Malaya. She has published her work in many national and international journals.
Her current work revolves around business strategy and open innovation.
Rashmi Sehgal is a Doctoral Student at the National University of Malaysia (UKM). She has
published her work in many national and international journals and newspapers. Her latest
research appeared in Asian Social Science.
Dr Indra Devi Subramaniam is a Senior Lecturer in the Faculty of Management in the
Multimedia University, Cyberjaya, Malaysia. Her research concerns organizational culture.
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