ORGANIZATION-CULTURE FIT: LOCAL CULTURE’S IMPACT ON MNC SUBSIDIARIES

Xiaoyu Pu, School of Business at SUNY New Paltz, U.S.A.
Huiping Li, Ramapo College of New Jersey, U.S.A.

Published in

JOURNAL OF ACADEMY OF BUSINESS AND ECONOMICS
Volume 19, Issue 2, p15-24, June 2019

ABSTRACT

This study draws upon the concept of person-culture fit as explored in previous research (O’Reilly et al., 1991) and introduces a new dimension of fit: organization-culture fit. This dimension refers to the characteristic fit between an organization and its local culture. It is proposed that the organization-culture fit is influenced by both the cultural dimensions of the business’ location, and the strategic characteristics of the organization per se. It is proposed that organization-culture fit influences the performance of an organization. For a foreign subsidiary, the influence is mediated by two effects – the within-organization effect and the inter-organization effect. The former refers to the impact within the subsidiary, such as turnover rate, employee satisfaction, etc. The latter indicates the impact on a subsidiary’s interaction with its external environment, e.g. subsidiary local embeddedness.

Keywords

Organization-culture, fit, subsidiary performance


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