Blackwell Science, LtdOxford, UKFSTFood Service Technology1471-5732Blackwell Publishing Ltd, 200552334Original ArticleCulture and performanceT. gaard, S.

Larsen & E. Marnburg

Peer review

Organizational culture and performance evidence from the fast food restaurant industry
Torvald gaard,* Svein Larsen* and Einar Marnburg*
*The Norwegian School of Hotel Management, Stavanger University, Stavanger, Norway; Department of Psychosocial Science, University of Bergen, Bergen, Norway

Abstract
Correspondence: Torvald gaard, The Norwegian School of Hotel Management, Stavanger University, N-4036 Stavanger, Norway. Tel: +47 51 83 15 97; Fax: +47 51 83 37 08; E-mail: torvald.ogaard@nhs.his.no Keywords: hospitality industry, organizational culture, performance, restaurant management

This paper explores the relationship between organizational culture and the performance of managers in the restaurant industry. We also introduce the managers job efcacy and commitment to the organization as variables intervening between organizational culture and performance. Data were collected in a restaurant/fast food operation which included franchisees as well as employed managers. Results suggest that there are relationships between culture and managers efcacy and organizational commitment, and that some cultural aspects are related to performance variables such as personnel cost and additional sales. In addition, managers commitment and efcacy are also related to performance.

General background
In multi-outlet operations within the service industry, there has been a tendency to production-line (Levitt 1972, 1976) service deliveries. As evidenced in the phenomenal success of franchise operations within the fast food business, the production-lining and accompanying division of labour has allowed specialization and efciency that may be very successful. However, two trends may have major inuence on the viability of the continuing success of the standardized product. First, the general tourism literature (e.g. Poon 1994) indicates that with increasing afuence, travellers and customers expect more than the standardized product, in as much as they expect sensitive attention to individual needs and customized products. The second trend is the rapid expansion of the standardized fast food/standardized service concepts that may imply an emerging market saturation of these operations. Competitiveness is thus increasingly dependent on the ability of suppliers to display the best practice in all facets of their operations and segment and tailor their products to local variations in taste and preferences (Dwyer et al. 2000). Standardized practices will not necessarily sufce to prosper in these market segments. Local adaptation, customization and

innovativeness will probably be needed much more, also within the multi-outlet operations. Even the epitome of extreme standardization, McDonalds, adapts to local customs, that is they adjust the menu to include for example sh in some countries, e.g. the McFisk in Norway and sh sandwiches in Hong Kong, beer and frankfurters in Germany and McSpaghetti in the Philippines, but they also adjust the production process to receive halal (clean, acceptable) certicates in Muslim countries (Watson 1997). These changes imply that local restaurant managers will not only be required to follow the book, they will, to a larger extent, be required to adapt products and personal service to local market conditions and the needs and wants of customers. Managers will have to be more market-oriented and more willing to adapt and manage personnel innovatively to be successful. Thus, individual motivation, commitment, efcacy and ability of managers to perform an extended range of market- and internally related activities will be of importance. Division of labour, rules and mass production characterizes production-line operations, and rules tend to dominate as behaviour moderators. On the other hand, organizations with high customer-contact and intensive technologies (Thompson 1967), to a larger degree, tend

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

23

24

Culture and performance T. gaard, S. Larsen & E. Marnburg

to allow for decentralization and empowerment, where the individual branch managers expected behaviour becomes so complicated that simple governance by rules is unfeasible. In this case, individual behaviour is more regulated by individual competence, and individual and shared values (Ouchi 1980; Dolan & Garcia 2002) than by rules. Organizational culture may be dened as an interdependent set of shared values and ways of behaving that are common to the organization and tend to perpetuate themselves (Kotter & Heskett 1992). Organizational culture has been assumed to have important implications, not only for the individuals affective reactions to organizational life, but also for the organizational performance (Kotter & Heskett 1992; Harris & Mossholder 1996; Dwyer et al. 2000; Kemp & Dwyer 2001; Dolan & Garcia 2002; Tepeci & Bartlett 2002). Chan et al. (2004) have suggested that organizational culture can be a valuable resource for companies, especially for service industries. In spite of the obvious call for knowledge about organizational culture and performance in the restaurant and hospitality industry, relatively little research has been conducted so far. Studies to date have mainly been in-depth case studies (e.g. Dwyer et al. 2000; Kemp & Dwyer 2001), which produce valuable insights but offer little general knowledge. Other studies have made promising progress towards developing hospitality industry specic measures of climate and culture (e.g. Davidson et al. 2001; Tepeci & Bartlett 2002), and one study has compared the culture of hospitality rms with other industries (Gray et al. 2000). Very little is, however, known about the relationship between culture and performance. In this study, we performed a quantitative analysis of the relationship between organizational culture and performance and also explored the relationship between culture and managers individual outcomes, as illustrated by the relationships in the model of Fig. 1: We address the following research questions (the numbers refer to relationships in Fig. 1): 1 What is the relationship between managers perceptions of the organizational culture and managers indi-

vidual organizational commitment and efcacy to perform their job? 2 What is the relationship between managers commitment and efcacy and business performance of the unit? 3 What is the relationship between the managers organizational culture perceptions and the business performance of the unit?

Theoretical concepts and relationships Organizational culture

There are many different denitions of organizational culture (Ott 1989). In addition to the Kotter & Heskett (1992) denition above, one may also note that culture is dened as how things are done around here (Triandis 1994). Schein (1981) suggests a taxonomy of culture aspects that have gained wide acceptance. He proposes that there are three levels of organizational culture: (i) basic underlying assumptions; (ii) values; and (iii) artifacts and behaviours. The basic underlying assumptions are unconscious or preconscious and thus difcult to assess directly. Although basic assumptions do not lead themselves readily to comparative studies (Schein 1992), artifacts and behaviour are the overt aspects of the culture. They are therefore easily observable but difcult to interpret, and as such, are relatively seldom investigated in comparative organization culture studies. Cultural values probably are the most frequently investigated cultural aspect. Values typically act as the dening element of a culture and norms, symbols, artifacts and behaviours revolve around them. Numerous taxonomies of values have been proposed in the literature. Lately there have also been promising attempts at developing quantitative cultural value measures specifically tailored for the hospitality sector (e.g. Davidson et al. 2001; Tepeci & Bartlett 2002). As these measures have not been extensively validated so far, we chose to employ the competing values approach (CVA) suggested by Quinn & Rohrbaugh (1981). The main advantages of the CVA is that the value dimensions proposed are theoretically derived from general organization theory so that ndings can be interpreted in a larger nomological network. The CVA has also been one of the most popular and inuential value frameworks for studying organizational culture value effects, and well-documented measures exist. The CVA model proposes two predominant dimensions by which cultural values vary, namely informal formal and internalexternal. The informalformal dimension reects preferences about the importance of organizational structure and involves a continuum

Organizational culture perceptions

Individual outcomes - Commitment - Efficacy

Business performance

Figure 1 Conceptual model. Number refer to research questions addressed.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

Culture and performance T. gaard, S. Larsen & E. Marnburg

25

from organic to mechanistic processes. This dimension represents a familiar distinction in organizational theory between organic and mechanistic forms of organization (Burns & Stalker 1968). The second axis, the internalexternal dimension, describes whether the emphasis is on the maintenance of an organizations internal socio-technical system or the improvement of its competitive position within the external environment. This axis reects the conicting demands created by the internal organization and the external environment. One end of the axis represents a focus on integration and buffering to sustain the existing organizations, while the other represents a focus on competition, adaptation and interaction with the environment. This dimension is also reected in many classics of organization theory such as Thompson (1967) and Lawrence & Lorsch (1967). The four cultures resulting from the intersection of the two dimensions have been labelled developmental culture or adhocracies, rational cultures or markets, hierarchical cultures or hierarchies and developmental cultures or clans (Cameron & Freeman 1991; Quinn & Spreitzer 1991). Each of the four types of cultural orientation represents one of the four major models in organization theory (Fig. 2). Within adhocracies, both exibility and their competitive position in their environment are emphasized (Deshpand et al. 1993). Hence they tend to value entrepreneurship, creativity and adaptability (Mintzberg 1979). Quinn (1988) notes that adhocracies tend to be effective at acquiring resources and performing boundary spanning functions. Effectiveness criteria include growth, the development of new markets and resource acquisition (Denison & Spreitzer 1991). In markets, cultural values such as goal achievement, productivity and efciency are emphasized, reecting

the external orientation and value for governance systems. Motivating factors include competition and the successful achievement of predetermined ends, whereas effectiveness criteria in such structures include planning productivity and efciency (Denison & Spreitzer 1991). Hierarchies emphasize order, uniformity, efciency, certainty, stability and control, reecting internally oriented and formalized values (Deshpand et al. 1993; Moorman 1995). Motivating factors include security, order, rules and regulation, whereas effectiveness criteria in hierarchies include control, stability and efciency (Denison & Spreitzer 1991). Clan cultures have a primary concern with human relations, participation is stressed as well as teamwork and cohesiveness (Ouchi 1980). The emphasis is on the internal organization with development of shared organizational understanding and commitment through participation and trust. Clan cultures have been found to be high in trust, low in conict and low in resistance to change (Zammuto & Krakower 1991). Effectiveness criteria include the development of human potential and member commitment (Denison & Spreitzer 1991).

Managers individual outcomes

While organizational culture values are crucial to a full understanding of employee behaviour and self-regulation, they are several steps removed from individual behaviour itself. In addition to shared values, individual cognitive and social processes may also inuence individual behaviour and thus inuence the culture performance relationship. Important self-regulation variables suggested in the literature include commitment (Locke & Latham 1990) and self-efcacy (Bandura 1977b; Mowday et al. 1979). On one hand, self-efcacy and commitment are results of the t between the individual manager and the organizational culture values, and on the other hand, efcacy and commitment are related to performance and job satisfaction (Locke & Latham 1990). Organizational commitment is the relative strength of an individuals identication with and involvement in a particular organization (Mowday et al. 1979). It is characterized by at least three factors: (i) a willingness to exert considerable effort on behalf of the organization; (ii) a strong belief in and acceptance of an organizations goals and values; and (iii) a strong desire to maintain membership in the organization. Commitment thus represents something beyond mere passive loyalty to an organization. It involves an active relationship with the organization such that individuals are willing to give something of themselves in order to contribute to the organizations well-being (Mowday et al. 1979, p. 226).

External focus

Ad hoc values Informal Organic

Market values Formal Mechanistic

Clan values Internal focus

Hierarchy values

Figure 2 The competing values framework. Source: adapted from Cameron & Freeman (1991).

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

26

Culture and performance T. gaard, S. Larsen & E. Marnburg

Self-efcacy on the one hand, is a persons belief in his or her capability to mobilize the motivation, cognitive resources and courses of action needed to exercise control over events in life (Wood & Bandura 1989) and on the other hand, a persons judgment of how well he or she can execute courses of action required to deal with prospective situations (Bandura 1977a). Wood & Bandura (1989) suggest that there is a difference between possessing skills and being able to use them well and consistently under difcult circumstances. People with the same skills may therefore perform poorly, adequately, or extraordinarily, depending on whether their self-beliefs of efcacy enhance or impair their motivation and problem solving efforts. Selfefcacy has also been suggested to grow stronger over time as the employee successfully performs tasks and builds the condence necessary to full his or her role in the organization (Gist & Mitchell 1992).

Performance
A number of performance measures have been suggested in the literature (see, e.g. Harris 1999). The general recommendation is that no single indicator will give a comprehensive picture of the performance (Atkinson & Brown 2001). Consequently, we have included one nancial performance indicator, i.e. last years prot. In addition, and in line with recommendations from Fitzgerald et al. (1991), we have included one service quality indicator (cleaning of the premises) and one resource utilization indicator (personnel cost percentage). Finally, we included one revenue management indicator recommended for hospitality operations, namely, additional sales (Atkinson & Brown 2001).

Cultural value perceptions and managers commitment and efcacy

There is neither strong theoretical agreement nor systematic empirical support for the relationships between competing organizational value perceptions and employee outcomes. It is, however, assumed that the shared values of the culture provide a cognitive context for the decision-makers when they evaluate their control or efcacy (White et al. 2003). Organizations with a more informal adhocracy or clan culture encourage spontaneity, initiative and responsiveness, and managers in more exible organizations may believe they have more freedom in doing their job and thus are more efcacious. Furthermore, Clan and ad hoc cultures stress participation, teamwork and cohesiveness which lead to greater trust, cooperation between members and commitment (Moorman 1995). Concomitant with

an emphasis on exibility, organizations with an ad hoc culture also tend to stress innovation and adaptation and thus are more likely to provide adequate resources in the event of unforeseen contingencies (White et al. 2003). Consequently, managers operating in clan and ad hoc oriented cultures are more likely to perceive their efcacy to be higher and to be more committed to the organization. This suggestion has been consistently corroborated in empirical studies in other industries (e.g. Cameron & Freeman 1991; Quinn & Spreitzer 1991; White et al. 2003), and have also been found in the hospitality industry (gaard 1999). Hierarchy values with emphasis on the internal functioning of the organization and on efciency and control may be negatively related to managers outcomes. This assumption presupposes that people have a strong desire to maintain their freedom of action, and when confronted with an attempt to be inuenced by others, they experience strong reactance and actually shift their attitudes and behaviours in a direction opposite to those being advocated or demanded (OReilly & Chatman 1996). In the hospitality setting, it seems reasonable to assume that hierarchies with rules and regulations may cause role conict between the exibility needed to satisfy customers and the rigidity of the organizational hierarchy (Bowen & Bowers 1986). Front line personnel often nd themselves face-to-face with the customer, and the hierarchy will probably hamper their functioning in the service delivery and lead to lower commitment and efcacy. Zammuto & Krakower (1991) found hierarchies to be associated with conict and scapegoating, and Quinn & Spreitzer (1991) found executives in units with a prole that was skewed towards hierarchies to be highly dissatised with their work. White et al. (2003) found a negative relationship between commitment and perceptions of hierarchical culture values and organizational control. Market/rational values afford a number of psychological and social benets to employees, and thus Kohli & Jaworski (1990) suggested that a market orientation leads to a sense of pride in belonging to an organization in which all departments and individuals work towards the common goal of satisfying customers. Accomplishment of this objective is posited to result in employees sharing a feeling of worthwhile contribution, a sense of belonging, and therefore commitment to the organization (Jaworski & Kohli 1993), and their perceived efcacy will be enhanced. Harris & Mossholder (1996) found market organizational values to be positively related to commitment, and within the market orientation tradition, market orientation has been found to be related positively to commitment (Jaworski & Kohli 1993). These ndings across a broad spectrum of industries seem to be fairly general, and one could

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

Culture and performance T. gaard, S. Larsen & E. Marnburg

27

expect the same pattern to hold for the food service industry. Thus, it could be expected that perceptions of clan, ad hoc and market cultures correlate positively with organizational commitment and efcacy, and that perceptions of hierarchy cultures correlate negatively with commitment and efcacy.

Individual outcomes and business performance

Organizational commitment is generally believed to result in the acceptance of organizational goals and values (Kelley 1993). As restaurant managers become more committed to an organization, resulting in greater acceptance of organizational goals and values, their behaviour will be more in accordance with organizational values, and they will be willing to put forth greater effort for the organization (Locke & Latham 1990; Kotter & Heskett 1992). Commitment has been found to be positively related to employee performance in a number of studies (for reviews, see, e.g. Brown & Peterson 1993; Singh et al. 1996; Parker et al. 2003), and also positively related to customer orientation (see, e.g. Kelley 1992). Furthermore, the striving and extra effort associated with commitment has been shown to be positively related to customer satisfaction (Mohr & Bitner 1995). Self-efcacy has also been found to be strongly related to future performance (e.g. Locke et al. 1984; Hartline & Ferrell 1996; Manstead & Eekelen 1998; Maurer & Pierce 1998), and it has been shown to have at least two distinct inuences on performance. Bandura & Cervone (1983) found self-efcacy to explain much of the effort put into performing tasks. In addition, self-efcacy enhances peoples motivation and problem solving efforts (Wood & Bandura 1989). Effort has also been shown to have a direct effect on service satisfaction (Mohr & Bitner 1995). The second mechanism through which self-efcacy works is goal choice. Locke et al. (1984), for example, reported that self-efcacy was strongly related to the goal level chosen in such a way that the more efcacious a person is, the higher the goal level chosen. On the basis of the discussion above, we expect that there is a positive relationship between commitment and business performance and that there is a positive relationship between efcacy and business performance.

Culture and business performance

Quinn & Rohrbaugh (1981) assume that all four cultural values are needed for long-term survival and suc-

cess an assumption generally supported in the literature. In a meta-analysis of 121 studies, Parker et al. (2003) found a number of cultural value perceptions to be consistently positively related to managers performance. These ndings have also been corroborated in later studies (e.g. Chan et al. 2004). Some studies have found that balanced values are needed in complex business situations (e.g. Ngwenyama & Nielsen 2003). It may therefore be assumed that in the long run, there is a positive relationship between cultural values and performance. Even though balanced values are assumed to be needed for long-term survival, Quinn & Rohrbaugh (1981) suggested that a given environment may favour some values to such an extent that a negative relationship between the other value(s) and performance may be observed. In the restaurant business, relatively high uncertainty may be experienced. Production and consumption must, to a large extent, be closely linked in time, which makes inventorying of products impossible or cumbersome resulting in greater variation in the pace of production. Furthermore, parts of restaurant services are intangible, customer needs and wants may to some degree be uncertain and nally, the customers disposition, willingness and ability to participate as a consumer may vary. All these sources of uncertainty imply that there is a broad base of support for using an organic (i.e. clan/ad hoc values) as opposed to mechanistic organizational structure (i.e. Mintzberg 1979; Bowen & Bowers 1986; Ngwenyama & Nielsen 2003). Managers must have a high degree of exibility within the system to be able to handle the uncertainty facing them. Specication of hierarchical rules may thus become unfeasible, and if attempted, rules may prove to be dysfunctional and result in lower service satisfaction (Bowen & Lawler 1992; Bowen & Schneider 1988). Rigid structures (i.e. hierarchies) do not allow the organization the exibility, it needs to adapt to the environment (Zaltman et al. 1973; Srensen 2002). Thus, a number of empirical ndings support a positive relationship between clan/ad hoc values and performance (e.g. Cameron & Freeman 1991; Paulin et al. 2000; Sousa-Poza et al. 2001; Parker et al. 2003). Likewise, a negative relationship between hierarchical values and performance has regularly been observed (Cameron & Freeman 1991; Deshpand et al. 1993; Moorman et al. 1993; Paulin et al. 2000). Market and rational values should also be positively related to business performance in the hospitality sector. First, the focus on goal achievement, direction, efciency and protability should inuence operations positively and lead to improved performance. Second, a market orientation implies that performance assessments in the company are based on customer data.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

28

Culture and performance T. gaard, S. Larsen & E. Marnburg

Managers willingness to implement products and procedures will be based on market assessments while considering the competitive situation. Consequently, a market-oriented manager should be striving for services that are efciently and effectively produced and have unique benets and product values to the customer (see, e.g. Moorman 1995; Gray et al. 2000). A string of studies have shown market orientation to be positively related to a number of effect- and efciency criteria i.e. product adaptation, sales, overall performance and protability (Deshpand & Farley 1999; Homburg & Pesser 2000). This implies that a positive relationship between perceptions of clan, ad hoc and market cultural values and business performance must be expected, and that a negative relationship between hierarchy values and business performance is to be expected.

Methods and materials Setting and sample

The study was conducted in a national Norwegian fast food multiunit franchise system with 58 retail units. The system comprised a total of 58 units including 22 franchisor-owned outlets, 8 multiunit franchisees with 27 outlets and 9 single outlet operations. Data for managers perceptions and outcome responses were collected in the spring of 2003 by means of pen and paper questionnaires administered to restaurant managers present at the annual sales evaluation meeting. All the managers except one of a single outlet operation were present at the meeting and completed questionnaires were collected from 57 respondents. The questionnaire was translated to Norwegian and translated back into English for validation. Most performance data were collected from the centralized accounting system of the main ofce, while cleanliness scores of the restaurant units were based on evaluations performed by independent judges on visits to each branch. That the main ofce does the accounting for all branches according to the same standards assures compatibility of the performance data. Because some of the branches had been established during the last year before the study took place, performance data were missing from 9 of the units leaving 48 units for the nal analysis.

ship to the main ofce is characterized by:. Hierarchy values include items like control, centralization and stability, continuity and order, while ad hoc values include exibility and decentralization and innovation and change. Typical clan value items include participation, open discussion and human relations, teamwork, cohesion, while market value items included Outcome excellence, quality and Task focus accomplishment, goal achievement. The response format ranged from 1 (is not emphasized) to 7 (is greatly emphasized). Organizational commitment was assessed by the short form of the Organizational Commitment Questionnaire (Mowday et al. 1979). In order to avoid item wording confounds, only the nine positively worded items were used from the original 15-item scale (cf. Mathieu 1991). Example items are: For me this organization is the best of all possible organizations for which to work. I talk up this organization to my friends as a great organization to work for. Efcacy measures included ve items and were based on Sherer et al. (1982). Items were adapted to the restaurant setting focusing on important areas of interaction between employees and guests. Typical items are: When I meet ordinary customers, I am always capable of doing an excellent job for them, and When customers are particularly demanding, I am usually capable of giving them positive experiences. Commitment and efcacy both had a Likert-type response format ranging from 1 (disagree completely) to 7 (agree completely). Organizational performance measures were collected from the standardized accounting- and report system of the franchisor. Prot margin referred to the gross prot margin for the preceding year (prot margin excluding nancial costs), Additional sales were calculated as the fraction of total sales for the preceding year that came from a specied set of items classied to be additional sales; cleanliness was evaluated by independent judges on an unscheduled yearly visit, personnel costs were calculated as a percentage of total revenue for the preceding year.

Data analysis
The respondents are described in Table 1. The sample has a balanced representation of men and women, and the managers are on average relatively young with a mean age of 29 years, the youngest manager is 19 years and the oldest 51 years. Only two managers are older than 40 years. The typical manager has been with the present company between 1 and 4 years, and they have industry experience of 410 years. All individual manager level perceptual measures were combined to form aggregate composite scores

Measures
Organizational culture values were measured with the instrument suggested by Quinn & Spreitzer (1991). Each culture dimension was assessed with four items. The introduction to each question was: The relation-

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

Culture and performance T. gaard, S. Larsen & E. Marnburg

29

Table 1 The sample prole n Gender Women Men Total Age Up to 25 2630 Older than 30 Total Professional experience Up to 4 years 410 years Over 10 years Total %

32 25 57 16 26 15 57 18 23 16 57

56 44 100 28 46 26 100 32 40 28 100 25 47 27 99

for each variable. This procedure was justied by our application of measures that have been extensively validated in the literature. Means and standard deviations of the composites are listed in Table 2. The further analysis is based on correlation analysis. Correlation coefcients are presented in Table 3. The analyses were conducted with SPSS 11.0 (SPSS Inc. 2001). Because of the limited number of cases, correlation coefcients will have to be of considerable magnitude (>0.25) to become signicant at P = 0.05. Because this research is of an explorative nature, we will in some instances comment on correlations signicant at P = 0.10.

Employment duration with company Up to 1 years 14 14 years 26 More than 4 years 15 Missing 2 Total 57

Results Organizational culture perceptions and individual outcomes

All the dimensions of organizational culture perceptions are positively related to the individual outcomes; commitment and efcacy. However, not all of the relationships are signicant. As expected, market and ad hoc culture dimensions are signicantly and positively correlated with efcacy (r = 0.29 and 0.38 respectively), but they do not have a signicant relationship to commitment. The clan culture is not signicantly related to any of the individual outcomes. Contrary to expectations, Hierarchy cultural values are signicantly and positively related to both commitment (r = 0.31) and efcacy (r = 0.27).

Table 2 Means and standard deviations (SD) of variables (summated scales) Mean Hierarchy values Ad hoc values Clan values Market values Commitment Efcacy Prot margin (%) Additional sales Cleaning Personnel cost (%) N = 48. 6.15 5.58 5.21 6.35 5.62 5.41 0.207 4.39 2.61 31.77 SD 0.54 0.73 0.82 0.56 0.82 0.75 0.11 1.60 0.34 5.70

Individual outcomes and business performance

In contrast to what was expected, individual outcomes are not systematically and signicantly related to business performance. However, there is a strong positive correlation between efcacy and additional sales (r = 0.41), and a weaker negative relationship between commitment and personnel cost (r = 0.20).

Table 3 Main relationships: correlation coefcients Commitment Hierarchy values Ad hoc values Clan values Market values Efcacy Commitment N = 48. *P 0.10; **P 0.05. 0.31** 0.13 0.10 0.08 0.012 1.00** Efcacy 0.27** 0.38** 0.14 0.29** 1.00** 0.012 Prot margin 0.053 0.10 -0.16 0.05 0.00 0.17 Additional sales 0.16 0.15 0.07 0.08 0.41** -0.13 Cleaning 0.07 0.14 0.09 0.06 -0.03 -0.02 Personnel cost -0.24** -0.22* 0.12 -0.22* -0.10 -0.20*

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

30

Culture and performance T. gaard, S. Larsen & E. Marnburg

Culture perceptions and business performance

Organizational culture perceptions are not signicantly and systematically related to business performance, none of the relations are signicant at the 0.05-level. At a less stringent signicance level of P = 0.10, three cultural values (hierarchy, ad hoc and market cultural values) are negatively related to personnel cost. Clan values are not signicantly related to business outcomes.

Discussion
The study demonstrates that there is a relationship between organizational culture and managers individual outcomes; commitment and efcacy, and some weak relations between culture and performance. Furthermore, the signicant relationships between managers individual outcomes and performance also suggest that culture may have important indirect effects on performance. Organizational culture, as conceptualized in the competing values framework (Quinn & Rohrbaugh 1981), thus seems to have a potential for furthering the understanding of branch managers individual outcomes and performance. Most of the ndings in this study were as anticipated, but a few results were unexpected and warranted further comments. We observed a positive relationship between hierarchy values and individual outcomes that was surprising. Our initial assumption was that interaction with customers would introduce uncertainties as to what would be appropriate behaviour (Bowen & Bowers 1986), and that excessive rules could hamper efcient performance and lead to reactance (OReilly & Chatman 1996). The observed positive relationship may instead suggest that managers accept the rules implied by hierarchy, and maybe the behavioural control offered by the rules is seen as a willingness of the main ofce to assume some risk for the local manager (Quinn 1988; Oliver & Anderson 1994). It may be that the perceived risk of operating a franchise is considered to be high and that the risk is reduced by headquarters rules. On the other hand, the amount of rules do not seem to be large enough to negatively inuence commitment and efcacy. One may hypothesize that the perceptions of risk and response to rules would be different for single outlet franchisees/managers compared with employed managers. The franchisee/manager may perhaps be assumed to be more entrepreneurial in approach and beliefs than the employed manager, and thus react negatively to rules and regulations of the franchisor, while the employed manager may be more rules-focused to ensure commonality of approach and delivery, and thus react

favourably to rules. To check this assumption, we ran subgroup analyses of the correlation between hierarchy values and individual outcomes, but no signicant differences were discovered. One of our reviewers very interestingly pointed out that franchisees/managers may have little experience in the food business before entering, and therefore need to have a rule system, while restaurateurs who would typically be employed as managers, normally have previous experience and may react negatively to rules. That is an exactly reversed response to rules than suggested above. Unfortunately, our data do not allow for closer subgroup analysis, and the detailed investigation of employed managers vs. managers/franchisees responses to rules will have to be analyzed in future studies. A second observation that warrants further comments is that clan cultural values were not related to managers individual outcomes. Although relationships are in the hypothesized direction, they fail to meet established signicance criteria. These ndings only weakly support propositions in traditional organizational development studies suggesting that an emphasis on human relations and open system values is a key element for enhancing fullment in the individual (Mirvis 1988). Furthermore, our results are also weaker than the ndings in a number of studies that have demonstrated signicant positive relations between how benecial the work environment is to the employee and his personal outcomes (for a review, see Parker et al. 2003). Why managers in the present setting seem to be less inuenced by perceptions of clan values is not evident. We may speculate that some of the uncertainty facing the manager may be related to efcient operation of the restaurant, i.e. to stafng, production, procurement, etc., while another part of the uncertainty originates in the variance of customers needs and wants. In our study, we focused on the managers perceptions of cultural values and personal outcomes. The immediate task facing the manager is a smooth operation of the local restaurant, and he or she may to a lesser extent be directly exposed to uncertainties originating in heterogeneous customers. Uncertainty in the production is perhaps more efciently handled by better rules and procedures, and clan values may be of lesser importance to the manager in his primary tasks, and thus to his personal outcomes. Regular employees with extensive customer-contact will, on the other hand, be more directly exposed to uncertainty originating from customers, and this uncertainty cannot be fully dealt with by standardization. Consequently, we may expect that clan values may be more directly related to personal outcomes, an interpretation that in our view invites further studies.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

Culture and performance T. gaard, S. Larsen & E. Marnburg

31

As for the insignicant relationships of the clan values and performance, our nding is in line with, for example, Moorman et al. (1993) and Deshpand & Farley (2004), who also failed to discover positive relationships. This nding may be related to our focus on the manager as discussed above. Paulin et al. (2000) suggest that clan values are important for customercontact personnel in longer lasting relationships to customers, as opposed to personnel that relate to customers in a more transaction based style. It is probably fair to assume that a considerable amount of interactions with customers in the fast food operations would be relatively short and more transaction oriented, hence the insignicant relationship. It would, however, be interesting to contrast our insignicant nding in fast food operations to a similar study in full-service restaurants. If employees are more intensively facing regular customers that may be interested in establishing a relationship with the restaurant and its employees, we may expect a stronger positive relationship between clan values and performance for this branch of the industry. Therefore, future studies should investigate more carefully how the dimensions of the organizational culture may be more or less relevant, depending on job content and environmental conditions (Ogbonna & Harris 2002; Srensen 2002). The cause and effect chain that links culture to prot margin is long. Culture would have to manifest itself rst in improved performance of the employees, then in improved quality of the products that again will have to be detected by the customer, who in turn will have to become loyal or increase his or her additional buying before the prot margin is affected (Oliver 1997). In the present case, we were not able to trace culture effects that extensively. There are a large number of other factors that directly and indirectly inuence performance, and more extensive modelling of variables intervening between culture and performance is needed to better understand the complicated relationship (Parker et al. 2003). It is, however, interesting that we did observe culture effects on personnel costs; higher levels of hierarchy values, ad hoc values and market values were all found to be associated with lower personnel cost. Thus we have found indications of culture effects at one of the rst levels of the culture prot chain. The relationship between individual outcomes, commitment and efcacy on the one hand and performance on the other, may also involve a long and complicated cause and effect chain that has not been modelled here. Once more we do, however, see that personal outcomes are related to the more immediate performance indicators while there is no relationship to prot margin. Achieving additional sales is one area where a managers efcacy seems to have important inuence. Addi-

tional sales may be effectively inuenced through programmes that focus employees attention on additional selling, and additional sales are registered every day, and thus there is immediate feed-back on the effects of the programmes. In fact, achieving additional sales may be the area of operation where the manager most unequivocally sees the effects of his management, and thus achieving additional sales may be one of the foundations of the managers perceptions of his or her efcacy. On a less stringent signicance level, commitment is related to personnel cost. Here we see the same pattern as for the cultural values. Cultural values as well as organizational commitment have an organizational referent, and are related to the same performance measure. Table 3 reveals that neither the prot margin nor the cleaning is related to any of the variables included in the model. Prot margin represents the average prot margin from the preceding year, and is probably a too general measure to capture the inuence from cultural values or managers individual outcomes. The cleanliness of the individual outlets is also assessed once a year on unscheduled visits to each outlet. The lack of significant relationships between cultural values and managers individual outcomes for these values may, at least partially, be a result of the number of random factors that inuence such a measurement.

Management implications
This study has demonstrated the relevance of organizational culture to operations in the restaurant industry. The results suggest that chain managers are well advised to consider organizational culture values as they are related to important employee outcomes as commitment and efcacy, and to economic performance. Of special interest to managers is the positive relationship between hierarchical values and individual outcomes and performance. Service industry operations in general and restaurant industry operation in particular are dependent on a certain degree of standardization, formalization and rules to achieve efciency (Levitt 1972, 1976). Nonetheless, for a long while there has been a tendency to focus on the intangibility of services and the unpredictability of customer needs and wants as arguments for decentralization, empowerment, and less rules. Customer-contact employees have been seen as the only people who can decide how to satisfy customers. Our study shows that rules, order, and hierarchical ordering are also called for in that they are positively related to the personal outcomes of the manager as well as positively related to performance indicators.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

32

Culture and performance T. gaard, S. Larsen & E. Marnburg

Thus, to sum up, the ndings of our study indicate that managers should be aware of the delicate balance between rules and hierarchy on the one hand and decentralization and empowerment on the other. Both are needed for efcient and effective operations.

Research implications
The organizational culture assessment in this study was based on a key informant approach; that is, with responses from managers alone. In the relatively small units investigated in this study, the manager can be considered a viable and knowledgeable key informant, but the validity of the measurements could still be improved. To get a better evaluation of the culture, future studies should include culture evaluations based on a wider sample of employees. Multiple internal interviews would also enable proper multilevel modelling of the organization culture and for subgroup analysis. In future studies, one should also consider including controls for or measurement of the uncertainty encountered by each outlet. Environmental volatility may have considerable inuence on the importance of culture for performance of each outlet (Srensen 2002) and nally, future studies should probably take care to include performance measures that are more immediate in response to behaviour of employees and more closely linked to the internal operation of the outlets. Further service quality data, customer satisfaction data and customer loyalty evaluations would all be viable candidates (Eccles 1991). The slightly surprising nding of a positive relationship between hierarchy values, individual outcomes and performance found in this study should be investigated more deeply. What kind of rules and hierarchy furthers individual and organizational functioning? What is the functional form of the relationship, are there a maximum number of rules beyond which rules become dysfunctional? How important is the perceived relevance of the rules? These are all questions that beg deeper analysis and should be scrutinized more carefully in future studies.

References
Atkinson H, Brown JB (2001). Differences between managers and line employees in a quality management environment. International Journal of Contemporary Hospitality Management 13:12835. Bandura A (1977a). Self-efcacy: toward a unifying theory of behavioral change. American Psychologist 84:191215. Bandura A (1977b). Social Learning Theory. Prentice Hall Inc.: Englewood Cliffs, NJ.

Bandura A, Cervone D (1983). Self-evaluative and selfefcacy mechanisms governing the motivational effects of goal systems. Journal of Personality and Social Psychology 45:101728. Bowen J, Bowers MR (1986). A marketing contingency approach to service organizational structure. In: Creativity in Services Marketing: Whats New, What Works, Whats Developing (eds M Venkatesan, DM Schmalensee & C Marshall), pp. 7882. American Marketing Association: Chicago. Bowen DE, Lawler EE (1992).The empowerment of service workers: what, why, how and when. Sloane Management Review 33:319. Bowen DE, Schneider BE (1988). Services marketing and management: implications for organizational behavior. In: Research in Organizational Behavior: An Annual Series of Analytical Essays and Critical Reviews (eds LL Cummings & BM Staw), Vol. 10, pp. 4380. JAI Press Inc.: Greenwich, CT. Brown SP, Peterson RA (1993). Antecedents and consequences of salesperson job-satisfaction metaanalysis and assessment of causal effects. Journal of Marketing Research 30:6377. Burns T, Stalker GM (1968). The management of innovation. Travistock: London. Cameron KS, Freeman SJ (1991). Cultural congruence, strength and type: relationships to effectiveness. In: Research in Organzational Change and Development (eds RW Woodman & WA Pasmore), Vol. 5, pp. 2358. JAI Press Inc.: Greenwich, CT. Chan LLM, Shaffer MA, Snape E (2004). In search of sustained competitive advantage: the impact of organizational culture, competitive strategy and human resource management practices on rm performance. International Journal of Human Resource Management 15:1735. Davidson M, Manning M, Timo N (2001). The dimension of organizational climate in four- and ve-star Australian hotels. Journal of Hospitality and Tourism Research 25:44461. Denison DR, Spreitzer GM (1991). Organizational culture and development: a competing values approach. In: Research in Organzational Change and Development (eds RW Woodman & WA Pasmore), Vol. 5, pp. 121. JAI Press Inc.: Greenwich, CT. Deshpand R, Farley JU (1999). Executive insights: corporate culture and market orientation: comparing Indian and Japanese rms. Journal of International Marketing 7:11127. Deshpand R, Farley JU (2004). Organizational culture, market orientation, innovativeness, and rm performance: an international research odyssey. International Journal of Research in Marketing 21:322. Deshpand R, Farley JU, Webster FE Jr (1993). Corporate culture, customer orientation, and innovativeness in Japanese rms: a quadrad analysis. Journal of Marketing 57:23 37. Dolan SL, Garcia S (2002). Managing by values: cultural redesign for strategic organizational change at the dawn of the twenty-rst century. Journal of Management Development 21:10117. Dwyer L, Teal G, Kemp S, Wah CY (2000). Organizational culture and human resource management in an Indonesian resort hotel. Tourism, Culture and Communication 2:111. Eccles R (1991). The performance measurement manifesto. Harvard Business Review 69:131137.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

Culture and performance T. gaard, S. Larsen & E. Marnburg

33

Fitzgerald L, Johnston R, Brignall R, Silvestro R, Voss C (1991). Performance Measurement in Service Businesses. CIMA: London. Gist ME, Mitchell TR (1992). Self-efcacy: a theoretical analysis of its determinants and malleability. Academy of Management Review 17:183211. Gray BJ, Matear SM, Matheson PK (2000). Improving the performance of hospitality rms. International Journal of Contemporary Hospitality Management 12:14955. Harris PJ (1999). Prot Planning, 2nd edn. ButterworhHeinemann: Oxford. Harris SG, Mossholder KW (1996). The affective implications of perceived congruence with culture dimensions during organizational transformation. Journal of Management 22:52747. Hartline MD, Ferrell OC (1996). The management of customer-contact service employees: an empirical investigation. Journal of Marketing 60:5270. Homburg C, Pesser C (2000). A multiple-layer model of market-oriented organizational culture: measurement issues and performance outcomes. Journal of Marketing Research 37:44962. Jaworski BJ, Kohli AK (1993). Market orientation: antecedents and consequences. Journal of Marketing 57: 5370. Kelley SW (1992). Developing customer orientation among service employees. Journal of the Academy of Marketing Science 20:2736. Kelley SW (1993). Discretion and the service employee. Journal of Retailing 69:10426. Kemp S, Dwyer L (2001). An examination of organisational culture the Regent Hotel, Sydney. International Journal of Hospitality Management 20:7793. Kohli AK, Jaworski BJ (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing 54:118. Kotter JP, Heskett JL (1992). Corporate Culture and Performance. The Free Press: New York. Lawrence PR, Lorsch JW (1967). Organization and Environment. Harvard Business School Press: Cambridge, MA. Levitt T (1972). Production-line approach to services. Harvard Business Review 5:4152. Levitt T (1976). Industrialization of service. Harvard Business Review 5:6374. Locke EA, Frederick E, Lee C, Bobko P (1984). Effect of selfefcacy, goals, and task strategies on task performance. Journal of Applied Psychology 69:24151. Locke EA, Latham GP (1990). Work motivation: the high performance cycle. In: Work Motivation (ed UEA Kleinbeck), pp. 425. Erlbaum Associates: Hillsdale, NJ. Manstead ASR, Eekelen SAMV (1998). Distinguishing between perceived behavioral control and self-efcacy in the domain of academic achievement intentions and behaviors. Journal of Applied Psychology 28:137592. Mathieu JE (1991). A cross-level nonrecursive model of the antecedents of organizational commitment and satisfaction. Journal of Applied Psychology 76:60718. Maurer TJ, Pierce HR (1998). A comparison of likert scale and traditional measures of self-efcacy. Journal of Applied Psychology 83:3249. Mintzberg H (1979). The Structuring of Organizations: A Synthesis of Research. Prentice Hall: Englewood Cliffs, NJ. Mirvis PH (1988). Organizational development: Part I an evolutionary perspective. In: Research in Organizational

Change and Development (eds WA Pasmore & RW Woodman), Vol. 2, pp. 157. JAI Press Inc.: Greenwich, CT. Mohr LA, Bitner MJ (1995). The role of employee effort in satisfaction with service transactions. Journal of Business Research 32:23952. Moorman C (1995). Organizational market information processes: cultural antecedents and new product outcomes. Journal of Marketing Research XXXII:31835. Moorman C, Deshpand R, Zaltman G (1993). Factors affecting trust in market research relationships. Journal of Marketing 57:81101. Mowday RT, Steers RM, Porter LW (1979). The measurement of organizational commitment. Journal of Vocational Behavior 14:22447. Ngwenyama O, Nielsen PA (2003). Competing values in software process improvement: an assumption analysis of CMM from an organizational culture perspective. Ieee Transactions on Engineering Management 50:10012. OReilly CA, Chatman JA (1996). Culture as social control: corporations, cults, and commitment. In: Research in Organizational Change and Development (eds BM Staw & LL Cummings), Vol. 18, pp. 157200. JAI Press Inc.: Greenwich, CT. gaard T (1999). The Role of Organization Culture in Service Operation: Effects on Customer Satisfaction and Employees Affective Outcomes. The Norwegian School of Economics and Business Administration: Bergen. Ogbonna E, Harris LC (2002). Organizational culture: a ten year, two-phase study of change in the UK food retailing sector. Journal of Management Studies 39:673706. Oliver RL (1997). Satisfaction: A Behavioral Perspective on the Consumer. McGraw-Hill: New York. Oliver RL, Anderson E (1994). An empirical test of the consequences of behavior- and outcome-based sales control systems. Journal of Marketing 58:5367. Ott SJ (1989). The Organizational Culture Perspective. Brooks/Cole Publishing Co.: Pacic Grove, CA. Ouchi WG (1980). Markets bureaucracies and clans. Administrative Science Quarterly 25:12941. Parker CP, Baltes BB, Young SA, Huff JW, Altmann RA, et al. (2003). Relationships between psychological climate perceptions and work outcomes: a meta-analytic review. Journal of Organizational Behavior 24:389416. Paulin M, Fergusson RJ, Payaud M (2000). Effectiveness of relational and transactional cultures in commercial banking: putting client-value into the competing values model. International Journal of Bank Marketing 18:32837. Poon A (1994). The new tourism revolution. Tourism Management 15:912. Quinn RE (1988). Beyond Rational Management: Mastering the Paradoxes and Competing Demands of High Performance. Jossey-Bass: San Francisco, CA. Quinn RE, Rohrbaugh J (1981). A competing values approach to organizational effectiveness. Public Productivity Review 5:12240. Quinn RE, Spreitzer GM (1991). The psychometrics of the competing values instrument and an analysis of the impact of organizational culture on quality of life. In: Research in Organizational Change and Development (eds RW Woodman & WA Pasmore), Vol. 5, pp. 11542. JAI Press Inc.: Greenwich, CT. Schein EH (1981). Does japanese management style have a message for american managers? Sloan Management Review 23:5568.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334

34

Culture and performance T. gaard, S. Larsen & E. Marnburg

Schein EH (1992). Organizational Culture and Leadership. Jossey-Bass Inc.: San Francisco, CA. Sherer M, Maddux JE, Mercandante B, Prentice-Dunn S, Jacobs B, et al. (1982). The self efcacy scale: construction and validation. Psychological Reports 51:66371. Singh J, Verbeke W, Rhoads GK (1996). Do organizational practices matter in role stress processes? A study of direct and moderating effects for marketing-oriented boundary spanners. Journal of Marketing 60:6986. Srensen JB (2002). The strength of corporate culture and the reliability of rm performance. Administrative Science Quarterly 47:7091. Sousa-Poza A, Nystrom H, Wiebe H (2001). A cross-cultural study of corporate culture on TQM in three countries. International Journal of Quality and Reliability Management 18:74461. SPSS Inc. (2001). SPSS for Windows, Version 11.0.0, SPSS Inc. Tepeci M, Bartlett ALB (2002). The hospitality industry culture prole: a measure of individual values, organizational culture, and personorganization t as predictors of job satisfaction and behavioral intentions. 21:15170.

Thompson JD (1967). Organizations in Action. McGraw-Hill Inc.: New York. Triandis HC (1994). Culture and Social Behavior. McGrawHill: New York, NY. Watson JL (1997). Transnationalism, localization and fast foods in East Asia. In: Golden Arches East: Mcdonalds in East Asia (ed. JL Watson), pp. 139. Stanford University Press: Stanford, CA. White JC, Varadarajan PR, Dacin PA (2003). Market situation interpretation and response: the role of cognitive style, organizational culture, and information use. Journal of Marketing 67:6379. Wood R, Bandura A (1989). Social cognitive theory of organizational management. Academy of Management Review 14:36184. Zaltman G, Duncan R, Holbek J (1973). Innovations and Organizations. John Wiley and Sons: New York. Zammuto RF, Krakower JY (1991). Quantitative and qualitative studies of organizational culture. In:. Research in Organzational Change and Development (eds RW Woodman & WA Pasmore), Vol. 5, pp. 83114. JAI Press Inc.: Greenwich, CT.

Blackwell Publishing Ltd. 2005 Food Service Technology, 5, pp. 2334