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Case 1 – The Wonderful World of Human Resources at Disney – Analysis Case

For your analysis of the case, apply the concept of organizational culture and strategic HR discussed in class and the following case reading:

Case: Yemen, G. and Isabella, L.A. (2013). Case:

The wonderful world of human resources at Disney

. Case no. UVAOB1051. Charlottesville, VA: Darden Publishing.

Case Reading: Wei, L. Q., Liu, J., Zhang, Y., & Chiu, R. K. (2008).

The role of corporate culture in the process of strategic human resource management: Evidence from Chinese enterprises.

Human Resource Management, 47(4), 777-794.

Assessment: This case will be assessed based on your analysis in response to three specific questions. Please note that

mind maps

flow charts

, drawings, images, or storyboards are encouraged for your response to question #2. In addition, you are expected to contribute in class for the case debrief.

Please write your response to the questions in an 1,000 to 1,200-word response. Please use APA citations and references to cite and reference the case and the required reading. Please include a cover page.

Questions:

1. What kind of culture does Walt Disney Company (WDC) want to create; and how do the HRM practices (select three) support the maintenance of this culture? (400-600 words)

2. Using your experience, the case, and the reading, answer the question: What are the connections between business strategy, HR strategy and culture? Answer this question by creating a conceptual map or pictorial image to explain how business strategy, HR strategy, and culture are integrated and aligned at WDC. Be prepared to introduce and explain your conceptual map or pictorial image in class. *Note that we will discuss conceptual maps in advance of this assignment (Week 2). This

link

may be helpful too.(https://www.youtube.com/watch?v=sZJj6DwCqSU)

3. Referring to your conceptual map or pictorial image, explain in more detail three key connections you identified between 1)business strategy, 2)HR strategy, and 3) culture at WDC. Please also ensure you apply the reading for this assignment to support these connections. Aim to make a minimum of three connections. Support each connection with evidence from the reading and the case (400 to 600 words).

UVA-OB-1051

Rev. Mar. 31, 2014

This case was prepared by Gerry Yemen, Senior Researcher, and Lynn A. Isabella, Associate Professor of Business
Administratio

Data were gathered from public sources and, unless cited, were based on one of the author’s notes
and experiences as a training participant at the Disney Institute in February 2012, and as a family visitor to a resort.
The case was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an
administrative situation. Copyright © 2013 by the University of Virginia Darden School Foundation, Charlottesville,
VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this
publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by
any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden
School Foundation.

THE WONDERFUL WORLD OF HUMAN RESOURCES AT DISNEY

You can design and create and build the most wonderful place in the world. But it
takes people to make the dream a reality.

—Walt Disney1

Five-year-old Oliver wanted to see the animals during his overnight stay at Disney’s
Animal Kingdom Lodge. It was early evening, too late to get in the park, so his grandmother
took him to a scenic overlook at the back of the lobby. As Oliver walked around, there were no
animals to be seen, only clusters of trees, some grasses, and dirt trails below the overlook.
Oliver’s grandmother could sense his disappointment. This was Oliver’s first visit to a place that
was supposed to enchant children, so parents or grandparents would bring them back.
Expectations were sky-high.

Once Upon a Time: Disney’s Heritage and Traditions

I only hope that we don’t lose sight of one thing: that it was all started by a mouse.
—Walt Disney2

The mouse that started it all was a character idea born out of desperation. Walt’s original
character, Oswald the Rabbit, for which he had just signed a contract for an animated series, was

1 “Walt Disney Quotes,” JustDisney.com, http://www.justdisney.com/walt_disney/quotes/ (accessed May 28,
2013).

2 “Top 10 Walt Disney Quotes,” MoveMeQuotes.com, http://www.movemequotes.com/top-10-walt-disney-
quotes/ (accessed

May 28, 2013).

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stolen by the New York distributor, who then hired all of Walt’s animators. On the train ride
back home, Walt got the idea for a mouse. “A mouse had always appealed to me,” he said.
“While working in Kansas City, I caught several in wastebaskets around the studio. I kept them
in a cage on my desk and enjoyed watching their antics.”3 The original name was to be Mortimer
Mouse, but Walt’s wife, Lilly, convinced him that the name Mortimer seemed too formal.
Mickey Mouse, the character that people loved and the icon of an empire-to-be, was born.

The animated film company that Walt founded in 1923 with his brother Roy (who put up
most of the money) got busy. Walt introduced the use of sound, then in its motion-picture
infancy, in the first talking animated film, Steamboat Willie. The film debuted in New York City
in 1928, and was a hit. Disney Brothers Studios was launched; a year later it was renamed “Walt
Disney Productions.”

To go along with the red-shorted, yellow-shoed mouse, Walt dreamed up some friends:
Pluto in 1930, Goofy in 1932, and Donald Duck in 1934. The brothers licensed these Disney
characters and began selling merchandise such as shirts, watches, and writing tablets with their
images. By 1937, Mickey’s image, on one distributed product or another, had found its way to 38
countries; to handle the volume, distribution offices for merchandise and films opened in Paris
and London. Mickey Mouse clubs started cropping up worldwide. Disney products had a global
appeal and reach.

Walt Disney Productions struggled financially for a while, but with the help of Bank of
America and some of their own money, the Disney brothers created a film in color called Snow
White and the Seven Dwarfs. Premiering in 1937 and opening nationwide in 1938, it was a
financial and artistic success, making millions of dollars. After that, Walt’s imagination and
Roy’s business acumen were an unstoppable combination, and by 1940, the firm had issued its
first stock. In 1954, they used another medium to share Walt’s imagination with the world: the
brothers created a television show called Disneyland (later called The Wonderful World of
Disney). Now Disney movie fans turned on their television sets each Sunday evening and
watched a variety of Disney characters and stories.

From Film to Theme Park

As it turned out, filmmaking and television shows were not the only projects on the
drawing board. The idea of expanding into theme parks came from the same guy who drew the
famous mouse—Walt. Although Roy was against the concept at first, creating a theme park fit
well with both Walt’s urge to escape the real world and dream and his goal to create happiness
for those who visited.

3 James R. Stewart, Disney War (New York: Simon & Schuster, 2005), 23.

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To create his ideal world outside the film channel, Walt gathered a select group of
animators, artists, directors, set designers, and writers from Walt Disney Productions—whom he
called “Imagineers”—and told them about his park idea.4 As with the sound stage of a film,
setting was important. With the Disneyland TV show as both inspiration and source of funding,
the Imagineers were asked to create a family-style amusement park in secret. Owned by
Disneyland Inc., the park would be spotless and meticulously groomed (bushes cut into the shape
of Disney characters, for example). “When I started on Disneyland,” Walt said, “My wife used to
say, ‘but why do you want to build an amusement park? They’re so dirty.’ I told her that was just
the point—mine wouldn’t be.”5 In fact, imagineers studied human behavior to discover the
distance an average person would walk holding an item before throwing it away (every 17 feet).

Disneyland Park was built on an 85-acre parcel of land in Anaheim, California and had
attractions modeled after images from popular Disney films. The park, raised above ground like
a stage, was to be “picture-perfect” in Walt’s words.6 Everything in the park was a prop that
would allow a make-believe show to run flawlessly from opening to closing. Park visitors were
guests and, during an average visit, would likely have as many as 60 encounters with employees,
called cast members. The experience was to be magical, offering visitors the “happiest place on
Earth,” and appeal to young and old. After all, the Disney brothers were in show business, and
Disneyland was a live show, every day, all day long. In 1955, one year after the debut of the
Disneyland television show, Disneyland Park opened at a cost of $17 million.

When open, the park filled with pleasant, wholesome, costume-clad cast members who
were onstage in the public areas of the park and eager to play a part in the live show while being
helpful and friendly. Indeed, no matter what job a cast member was hired to perform, the
standard was always “to exceed guests’ expectations.”7 That point was so important to Walt that
he would dress so no one could recognize him, tour the park, and go on attractions. One time he
took the Jungle Boat ride and was unhappy that, instead of lasting seven minutes, it only lasted
four. “How would you like to go to a movie and have the theater remove a reel in the middle of
the picture,” he asked the ride supervisor. “Do you realize how much those hippos cost? I want
people to see them, not be rushed through a ride by some guy who’s bored with his work.”8

Under the park, at ground level, was an area called offstage, where cast members changed
into character, took breaks, and prepared for their parts. Connected through a maze of hallways
or tunnels were well-appointed break areas, vending machines, hair designers, a notary, driver’s-
license renewal services, check cashing services, postage stamp machines, and, as cast members

4 All designers, engineers, architects, and technicians that created and worked on park resorts were imagineers
(imagination and engineer).

5 Richard Hoffer, “Disneyland Turns 50,” Via, July/August 2005, http://www.viamagazine.com
/attractions/disneyland-turns-50 (accessed August 21, 2012).

6 Tom Peters as quoted in In Search of Excellence, Enterprise Media video, 1982.
7 Disney Institute and Theodore Kinni, Be Our Guest: Perfecting the Art of Customer Service (New York:

Disney Editions, 2011), 14.
8 Disney Institute and Theodore Kinni, 130.

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were provided fresh costumes daily, one of the largest wardrobe departments in the world.9 An
underground tram would transport cast members back and forth to quiet corners of the park
where they would appear onstage discreetly through unmarked doors.

To Walt, every detail mattered. This was perhaps an extension of the painstaking nature
of drawing animation, eventually referred to by animators as bumping the lamp.10 Fostering a
sense of pride was at the forefront of Walt’s work and, he hoped, the work of every single person
working for the company. To ensure that happened, Walt designed an elaborate employee hiring
and training process that supported his management philosophy and, above all, allowed for a
workplace where creativity could thrive (see Exhibit 1 for the Disney creativity model).

All hiring took place at the Walt Disney World Casting Center. Each cast member was
trained to perform for the roles they would be playing while onstage. The only downtime
allowed was when cast members were offstage, at which point they were allowed to be
themselves. If by chance, a noncast member was in the offstage area, cast members were
required to stay in character and were not allowed to speak or show the person underneath the
costume.

Eager to open more, Walt secretly bought several acres of land on the opposite coast, just
outside of Orlando, Florida. But before his plans to open another theme park could come to
fruition, he died.

The years between 1939 and 1966, the year of Walt’s passing, were considered the firm’s
golden years. Five years after his death, a second theme park, Walt Disney World Resort (Disney
World) opened in Orlando, home to the Magic Kingdom and two hotels.

Inside the Magic Kingdoms

Disney World and Disneyland were both built and run on what had widely become
known as “Disney magic.” Disney values and beliefs, which for the most part were deliberately
designed by Walt and Roy Disney, made up its corporate culture and became apparent with
every visit to a park. The Disney brothers’ strategy was to exceed customer expectations through
strict attention to detail and policies and procedures designed to deliver quality. To do that, they
believed that cast members must be enamored with being part of Disney and embrace the firm’s
purpose to bring entertainment to young and old—to make people happy. If that transpired, Walt
believed a collaborative culture would emerge. And when that happened, he expected financial
results would follow.

9 Peters.
10 The animators for Who Framed Roger Rabbit ended up adding more time and money to the film because

when Roger Rabbit bumped into a swinging lamp they didn’t see a shadow on the rabbit’s face. They redid the
animation to make sure it appeared despite the likelihood that most viewers never would have noticed.

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The goal was to captivate guests with everything Disney; the first step toward that goal
was to treat potential employees well. Walt and Roy thought that if the company treated cast
members as guests, they would treat guests and each other the same way. Whether one was a
guest or a cast member, creating a supportive environment was all part of management’s
commitment to keeping the magic going.

Becoming Part of the Walt Disney Company (WDC)11

As with most organizations, the first step to becoming a cast member at WDC was filling
out an application onsite or remotely through a job line.12 If there was interest in the applicant, he
or she would be invited to audition for a role, which included going through an interview process
at the casting center. Opened in 1989, the center provided job seekers the first hint that Disney
was about magic and make-believe. Like everything else Disney, Walt’s presence could be felt
throughout: diamond shapes in colors on the front of the casting building corresponded with a
photo inside of him wearing his famed argyle socks with matching diamond shapes and colors.
Awnings covering the entrance to the casting center building had a castle-like look, and once
inside, the doorknobs were identical to the talking ones in Disney’s famous film—Alice in
Wonderland. The building’s hallway walls, ceilings, and floors featured Disney characters and
film scenes. “Let them wander,” Robert A. M. Stern, the architect, once said. “Let them get a
taste for Disney before they get here.”13 Once applicants reached the second-floor recruitment
office, they would apply for roles and watch a film about Disney’s heritage, regulations, and
terms of employment. At that point, if still interested, applicants would be sent to an appropriate
place to be interviewed for their chosen role.

The interviews were structured and purposeful. If an interviewee was auditioning for a
position to accompany a character, they might be asked: “What would you do if you were paired
with Donald Duck and someone kicked him?” If the interviewee laughed or suggested they
would “kick that person back,” then being a character partner was not a good fit. If instead they
said, “Tell the kicker it was time for Donald Duck’s lunch, so we must get moving,” then being a
character partner made sense. The idea was that roles should play to cast members’ strengths and
that there was a place for every kind.

In addition to the interview questions, each person auditioning was once more informed
of employment conditions. Perhaps the most talked-about condition was appearance—hair
length, amount of facial hair, and quantity of jewelry. Following a successful audition, each new
cast member, regardless of position in the firm, would be sent to Disney University.

11 In 1985, Walt Disney Productions became the Walt Disney Company.
12 With time, Disney used other channels for parts of its casting process such as job fairs, recruiting programs,

and the Internet.
13 Disney Institute and Theodore Kinni, 63.

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Traditions I class

Walt established Disney University as a place for new cast members to rehearse for
performances and practice all things Disney. Being selected to teach there was considered an
honor, so each year hundreds of cast members applied to leave their roles and become Traditions
assistants. Their job was to pass on Walt’s legacy and help new cast members learn about Disney
characters and films. Attendees engaged in Trivial Pursuit-like games by answering such
questions as “what were the names of the Seven Dwarfs? what was Donald Duck’s middle
name?” meant to bolster their knowledge about the company’s heritage, traditions, language,
symbols, and shared values. The program was designed to instill a sense of excitement about
working at Disney.

First-name-only tags were worn on the left side, as all new cast members discovered who
Disney was as a firm (its vision), what Disney did (its mission), and for whom (guests).
Throughout these lessons, cast members learned to act and speak courteously (welcome and
thank every guest), became familiar with the Disney language (see Table 1 for examples),
practiced using an appropriate tone of voice, learned to focus on the positive and use humor
instead of rules and regulations, and rehearsed appropriate body language.14 At the same time,
they were introduced to issues of safety (what to do in an event of an accident) and how to
answer the numerous questions cast members were routinely asked. It turned out that the most
frequently asked question at Disney theme parks was the location of the bathroom. (There were
phones to a central answer service hidden in shrubbery around the parks.)15 All cast members
were trained to react and offer help if they saw a guest in need.

Table 1. Disney speak.

Corporate World Disney Corporate World Disney
Customers/clients Guests Job Role

Employees Cast members On the job Performance
Out front Onstage Working Show

Behind the scene Offstage Negative customer experience Bad show
Front-line employee Host/hostess Positive customer experience Good show

Job interview Audition Courtesy Performance tips
Human resources Casting Rides Attractions

Data source: Disney Institute and Theodore Kinni.

No cast member was allowed to complain about problems around guests; it was a cast
member’s job to ensure that all guests had a magical experience—regardless of how she or he
was feeling. On the other hand, Disney recognized that working with the public was often
difficult and that from time to time, despite the best planning, things would go wrong. How
many times could a cast member answer the same questions, such as “What time does the 3:00

14 Disney Institute and Theodore Kinni, 71–72.
15 Thomas J. Peters and Robert H. Waterman Jr., In Search of Excellence: Lessons from America’s Best-Run

Companies (New York: Harper & Row, 1982), 168.

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p.m. parade start?” For those moments, cast members were taught to find your applause. That
meant discovering what their value to the organization was, something they did as a cast member
that was meaningful to them, and focusing on it when they felt down or tired.

By the end of a day spent in the Traditions course, all new cast members would
understand that at Disney all employees, no matter their job, were important to the company (see
Exhibit 2 for values statement). To express this, cast members were asked to picture a bolt of
polka dot fabric with each Disney cast member represented by one dot on yards and yards of
material. If that was a cast member’s position in the organization, what would happen to the
fabric if a single dot was missing? At Disney, every dot counted.

Local traditions

After learning about the overall Disney culture on the first day, cast members were sent
to the park, where training at the local level was conducted in several steps according to job
category. If, for example, a cast member was going to join the show as an operator of the Jungle
Boat attraction, he or she would start with a safety course along with all the other new cast
members training to be attraction operators. They would study how the equipment worked and
what it took to be successful theme-park attraction operators.

Following that, the new operators would be sent for a local orientation. For the new
Jungle Boat cast member, he or she would go to Adventureland to learn information about that
show. Although aligned with Disney values, each theme area’s performance culture had its own
mission, vision, and values. The new cast member would shadow a seasoned cast member to
learn the special language, the script, and the planned and rehearsed steps to safely navigate the
boat and guests through the make-believe, danger-infested river waters.

Once there was complete confidence that the new cast member could perform, he or she
would be allowed to operate the attraction under the watchful eye of a mentor to ensure that the
first few trips went smoothly, that the boat trip looked dramatic, that the new cast member had
his or her lines down pat, and that the ride was the right length of time—never short of the seven
full minutes!

While training at the local site, new cast members would meet their manager. In addition
to making the workplace more comfortable, management worked to identify cast members doing
a great job at the park. If, for example, a cast member learned that a guest was ill and arranged
for a Mickey Mouse get-well card to be sent to their hotel room, the cast member would likely be
given a Guest Service Fanatic card from his or her manager. Anyone receiving such a card
would place it in a drop box from which five or six names were drawn each month and the
chosen cast members rewarded with a prize. The drawing was a big deal, with either a senior
executive or popular Disney character picking the names out of the box. Success was to be
celebrated.

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The attachment

Did Disney’s distinctive culture really explain the company’s popularity among children
and adults? Based on its own research, Disney management thought that loyalty to its brand
started through slightly different channels for children and adults. For children, exposure to the
Disney brand usually began after watching a television show or movie. Each story generated a
favorite or several favorite characters that often led children to pester their parents into taking
them to a Disney theme park, where they could meet them, buy merchandise, and perhaps attend
some stage shows. Those elements (movie, character, products, theme park rides) cross-fertilized
each other’s demand. For example, there was an attraction called the Pirates of the Caribbean in
the theme park before the Pirates of the Caribbean movie came out. There had never been a
Captain Jack in the attraction, but so many children asked where the movie character was (and
cast members made a note each time they did) that Disney added him to the ride.

The Disney relationship with most adults generally started with their experiences as
children. They would then encourage their children to watch Disney television and films, which
most considered child-appropriate in content. In turn, adults were willing to spend money on
Disney merchandise and trips to theme parks. All that ended up with the entire family sharing a
magical experience (courtesy of Disney) and one that Disney hoped many families wanted to
repeat. According to folks at the Disney Institute, “We may not remember what someone said to
us, but we certainly remember how someone made us feel.” Indeed, Disney World’s repeat
customer percentage was more than 70%, and hotel occupancy was usually more than 90% full,
according to Bruce Jones, program director of the Disney Institute. Those kind of numbers
suggested that, whether it was parents or their offspring, Disney park visitors liked to come back.

Outside the Magic Kingdoms

Following Walt and Roy Disney’s deaths, their beloved company went through some
rough times, frequently referred to as transition years (1971–1984). WDC had let its filmmaking
business lag and had instead relied upon theme park revenue (in 1984, 80% of operating income
was from theme parks and 1% from movies).16 The greater part of revenue generation at parks
and resorts was within the spring, summer, and last couple weeks of December, leaving several
months unutilized. Neglect of its film business resulted in an exodus of creative talent to other
studios, where they made hit films. As value for shareholders dropped, Saul Steinberg, a venture
capitalist, tried to take over the company to sell piece by piece. A group of friendly investors
(Bass Brothers Enterprises) helped the company out of the takeover crisis and in 1984, Michael
Eisner was appointed chairman and CEO, and Frank Wells was selected as president and COO.

16 John Huey, Joe McGowan, and Therese Eiben, “Eisner Explains Everything,” Fortune, April 17, 1995,

http://money.cnn.com/magazines/fortune/fortune_archive/1995/04/17/202090/index.htm (accessed Aug. 28, 2012).

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The pair rejuvenated the company and built the foundation that Disney grew to a media
empire by 2012. Disney’s World Wide Parks and Resort were just one part of an integrated
network, joined by studio entertainment companies (such as Disney Studios Motion Pictures,
Disney Animation, Pixar, Touchstone, and Marvel), media networks (e.g., Disney Channel,
ABC, ESPN), Disney Consumer Products (e.g., Disney Stores) and Disney Interactive (e.g.,
Disney Interactive Games).

Just as the company started with Walt the leader, WDC viewed leadership as the
beginning of and support to a chain of excellence. When the story began just shy of a century
ago, the longevity of Walt’s leadership viewpoint was unclear. Yet in 1977, Disney documented
the beginnings of a philosophy (see Exhibit 3) that had succeeded in maintaining a powerful
connection between inspired leaders, motivated employees, and satisfied customers who together
drove financial results and brand loyalty.

Over the years, the human relations aspect of the leadership philosophy evolved from
Walt’s key points into a more holistic partnership between employees and company leaders that,
in turn, benefited customers, whether the relationship was through sports or cinema. This
partnership included encouraging employees to pursue healthy lifestyles, develop their careers,
and take time off. To help with what the company described as “refueling,” employees were
given complimentary tickets to Disney’s parks, discounts at company-operated shops, and an
array of company-sponsored services such as computer assistance programs.17

As Disney leadership progressed, it continued to refer to the process as storytelling.
Whether it was management supporting customized training programs, education
reimbursement, or professional/career development for employees, “hope and positive
outcomes” were part of the goal—and each employee’s work experience was meant to be
innovative and engaging, because Disney leadership continued to believe that the best ideas
came from employees.18 And championed employees ensured happy guests.

What Lives On?

Back at the Animal Kingdom Lodge overlook, with no animals in sight, a disappointed
Oliver marched right up to a Disney cast member dressed as a park ranger and said, “Mr.
Zookeeper, I want a tour to see the animals.” As if on command, a zebra emerged from the
distant trees and lay down. Without missing a beat, Mr. Zookeeper said, “See, the animals are
starting to go to sleep, which is why you can’t see them.” Oliver beamed and asked a string of
questions about animals sleeping: “Where are the rest of the animals? Where do they sleep? Do

17 “Total Rewards: Support Beyond your Imagination,” Disney Careers, http://disneycareers.com/en/working-

here/total-rewards/ (accessed June 7, 2012).
18 “Learning & Development,” Disney Careers, http://disneycareers.com/en/working-here/learning-

development/ (accessed June 10, 2013).

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-10- UVA-OB-1051

they have a house to go to?” All the way back to the room, he stopped at each overlook to see
where other animals were going to sleep.

There were many different ways the interaction could have unfolded between this young
guest and the cast member he encountered. What made this exchange a memorable experience
for this young guest? Would Walt have been surprised?

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-11- UVA-OB-1051

Exhibit 1

THE WONDERFUL WORLD OF HUMAN RESOURCES AT DISNEY
WDC Inspiring Creativity Model

Data source: Adapted from Disney Institute and Theodore Kinni.

Organizational
Identity

● A common
understanding of who
you are, what you
create, and who you
create it for

● Understand the
parameters within
which your
organization can
create

● Be clear on the
organization’s identity

● Save resources by
focusing on creative
energy

Structural Systems

●Ensure effective
decision making

● Move forward
economically

● Lead to measurable
results

Collaborative
Culture

● Build genuine
relationships

● Produce the best
and most ideas using
available resources

● Make sure ideas
can be expressed
honestly and without
fear

Leader’s Role

● Inspire the culture

● Commit to
organizational
identity

● Be responsible for
holding components
together

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-12- UVA-OB-1051

Exhibit 2
THE WONDERFUL WORLD OF HUMAN RESOURCES AT DISNEY

The Walt Disney Company Human Resources1

We aspire to inspire together.

Diversity

Having a diverse work force is critical to our business. We welcome a variety of opinions, ideas, and perspectives to
ensure we continue to top our own performance and represent our global marketplace. When our people reflect the
communities we serve, it enhances the way we connect to our guests, audiences, and consumers. Together, we work
toward an inclusive environment that fosters creativity, innovation, and camaraderie across all our companies.

Culture

Each of our companies has a unique ability to harness the imagination in a way that inspires others, improves lives
across the world, and brings hope, laughter, and smiles to those who need it most. Together as one team, we
embrace the values that make the Walt Disney Company an extraordinary place to work:

•Innovation
◦We are committed to a tradition of innovation and technology.
•Quality
◦We strive to set a high standard of excellence.
◦We maintain high-quality standards across all product categories.
•Community
◦We create positive and inclusive ideas about families.
◦We provide entertainment experiences for all generations to share.
•Storytelling
◦Timeless and engaging stories delight and inspire.
•Optimism
◦At the Walt Disney Company, entertainment is about hope, aspiration, and positive outcomes.
•Decency
◦We honor and respect the trust people place in us.
◦Our fun is about laughing at our experiences and ourselves.

These values live in everything we do. They create a unified mission that all our people believe in and work toward.
And to recognize individual efforts, we have a variety of reward programs, including:

•Quality of Work
•Length of Service
•Community Volunteerism
•Employee of the Month Recognition

These are just some of the ways the Walt Disney Company commits to providing a rewarding, inclusive, and
supportive work environment.

1 “Culture & Diversity,” Disney Careers, http://disneycareers.com/en/working-here/culture-diversity/ (accessed

May 28, 2013).
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-13- UVA-OB-1051

Exhibit 3

THE WONDERFUL WORLD OF HUMAN RESOURCES AT DISNEY
The Disney Way of Leadership (1977)1

A Disney Leader Gets Results Through People

Simplified, this means that a Disney Leader is a people specialist. He does not get results by doing his own thing; he
works with other people and helps them put on a good show. It is a known fact that leadership is a science and can
be learned like any other skill, but you have to work at it every day. There are some key skills important to the
Disney Way of Leadership.

Human Relations Skills

Good Human Relations is a basic cornerstone of the Disney people philosophy. The success of our organization
depends on the way we deal with people, and it begins with the way we deal with our employees. Our ability to
work positively with people lies in continually putting to practice some key points.

• Set the example; it starts with you.
• Encourage a positive attitude.
• Get to know your employees; treat them as individuals.
• Be with your team; provide encouragement and attention.
• Use empathy; look at the other person’s point of view.
• Have respect for others.
• Be objective; be firm, fair, and consistent.
• Give recognition for a job well done.
• Maintain your sense of humor.
• All problems are not the same; treat each individually.
• If an employee has a problem, help solve it.
• If a promise is made, keep it.
• See that your employees have good working conditions.

Communications Skills

One of the most valuable and important skills of the Disney Leader is his ability to effectively communicate. All the
positive human relations techniques available today are virtually useless without effective communication.

Since communication means getting ideas across and finding out what other people have to say, we stress the
following points in the Disney Way of Leadership:

• Communicate clearly; get your message across.
• Let your employees know how they’re doing.
• Encourage upward and downward communications.
• Listen to what employees have to say.
• Keep an open door and an open mind.

1 The Disney Management Style (Walt Disney Productions, 1977), 32–34. Excerpt also used in Jeanne M.

Liedtka, William E. Fulmer, and Robert M. Fulmer, “Walt Disney Productions (A): The Walt Years,” UVA-BP-
0332 (Charlottesville, VA: Darden Business Publishing, 1993): 21–23.

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-14- UVA-OB-1051

Exhibit 3 (continued)

• Tell employees how they fit in; explain the big picture.
• Let your employees feel like they belong.
• Communication should be direct, open, and honest.

Training Skills

Training is the method of developing the basic skills to create an efficient work group and is the responsibility of
every Disney Leader.

An efficient operation can never come about as the result of a “happy accident.” Each employee must have a clear-
cut idea of what they are expected to accomplish and how to achieve it with the greatest proficiency.

Some key training points to remember:

• Be sure your employees receive the proper training, which they need for doing their job.
• Provide for your employees’ future growth and development.
• Give employees a chance to learn and participate.
• Encourage new ideas and creative contributions.

Other Leadership Skills

In addition to the aforementioned skills, the Disney Leader also needs to be aware of and skillful in areas of
planning, organizing, directing, and controlling his/her team’s efforts.

Planning is really just looking ahead. Once objectives are understood, the means necessary to achieve them are
presented in plans. Organizing is the process of putting all the resources together to carry out the plan. Directing
involves the process of carrying out the plan using all the resources gathered. Controlling measures performance in
relation to expected standards of performance.

The Disney Way of Leadership stresses arranging work into a logical and workable manner to insure its successful
completion. Keep in mind these helpful points.

• A plan of action is the best control to make sure we get there.
• Don’t over-structure a plan; stay flexible.
• Set clearly defined priorities and completion schedules.
• Be realistic with target dates but set them.
• Don’t assume; follow-up on assignments and requests.
• Organize around jobs and people.
• Find the right person for the job.
• Issue effective and understandable instructions and directions.
• Establish effective controls to get things done in a timely manner and by priority.

In summary, the Disney Way of Leadership actually integrates all of these skills, applies them as appropriate at the
point of action. It’s only through daily application and practice that we “fine tune” the essential skills of effective
leadership.

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T
here i

a growing body of research on
strategic human resource manage-
ment (SHRM). It is increasingly ac-
knowledged that people are valuable
resources for business success and

can be a source of sustainable competitive
advantage for a firm (Ulrich, 1987; Wright &
McMahan, 1992). Firms employing HRM
practices that are internally consistent and
compatible with firm strategy are believed
to be superior performers. SHRM links
human resource management practices with

the business strategy and mobilizes the abil-
ity and actions of organizational members
toward the firm’s goals (McMahan, Virick, &
Wright, 1999; Ulrich, 1987). By facilitating
the management process, it also has a criti-
cal impact on initiating

organizational

change and development and, thus, lever-
ages the implementation of a firm’s strategy
(Lengnick-Hall & Lengnick-Hall, 1988).
SHRM affects the behavior of individuals in
their efforts to formulate and implement the
strategies (Schuler, 1992) as well.

THE ROLE OF CORPORATE

CULTURE IN THE PROCESS OF

STRATEGIC HUMAN RESOURCE

MANAGEMENT: EVIDENCE FROM

CHINESE ENTERPRISES

L I – Q U N W E I , J U N L I U , Y I C H I Z H A N G , A N D
R A N D Y K . C H I U

Extant research on strategic human resource management (SHRM) has pri-
marily focused on the content of SHRM (best practices, bundles of practices,
etc.) and its effect on firm performance. Little research has examined the
SHRM process so as to better understand how SHRM is adopted and imple-
mented and what impact it has on organizational processes and outcome

This article examines the role of corporate culture in the SHRM adoption and
implementation process. Empirical results from a sample of 223 Chinese en-
terprises indicate that corporate culture has an impact on the adoption of
SHRM, and that different types of culture affect the SHRM process differently.
Specifically, group and developmental cultures have positive effects on the
adoption of SHRM, but the effect of hierarchical culture is not significant. De-
velopmental culture is also found to have a direct effect on firm performance.
This study offers significant implications for HRM in China and other dynami

Correspondence to: Dr. Li-Qun Wei, Department of Management, Hong Kong Baptist University, Kowloon Tong,
HKSAR, PRC, Phone: +852 3411 7566, Fax: +852 3411 5583, E-mail: weiliqun@hkbu.edu.hk or Jun Liu, E-mail:
junliu@ruc.edu.cn if there are further inquiries.

Human Resource Management, Winter 2008, Vol. 47, No. 4, Pp. 777–794

Published online in Wiley InterScience (www.interscience.wiley.com).

DOI: 10.1002/hrm.20244

778 HUMAN RESOURCE MANAGEMENT, Winter 2008

Current research, however, primarily has
examined the content of HRM systems, in-
cluding best practices, HRM systems, and
bundles of HRM practices. These practices
have been found to be positively associated
with firm performance (Delery & Doty, 1996,
Huselid, 1995) and have been tested in vari-
ous contexts, including China (Bjorkman &
Fan, 2002; Law, Tse, & Zhou, 2003). The
process of SHRM, however, has been rela-
tively neglected (Bowen & Ostroff, 2004).

Drawing on the contingency perspective,
scholars have examined some moderating ef-
fects on the relationship between SHRM and
firm performance, such as the role of strategy

(Delery & Doty, 1996; Huselid,
1995; Martell, Gupta, & Carroll,
1996), country origin, firm size,
and corporate culture (Bae, Chen,
Wan, Lawler, & Walumbwa, 2003;
Chan, Shaffer, & Snape, 2004;
Panayotopoulou, Bourantas, &
Papalexandris, 2003). However,
examinations of these moderators
provide evidence of the condi-
tions affecting the strength of the
SHRM-performance link only,
and fail to explore what happens
in the SHRM process.

Mediation study has been ar-
gued to be process analysis. Re-

sponding to a call to uncover the “black
box” of the SHRM-performance link, re-
searchers have examined some mediating
effects of the SHRM-performance relation-
ship. For example, Huselid (1995) tested
the mediating role of employee turnover
and productivity on the relationship be-
tween high-performance work practices
(HPWPs) and financial performance.
Collins and Clark (2003) tested and con-
firmed the mediating effect of the internal
and external social network on the rela-
tionship between a set of network-building
HR practices and firm performance. Yet,
these studies employed best practices or
specific sets of HRM practices, and certain
individual factors were observed only as
mediating the SHRM process. There has
been no systematic study of any organiza-
tional-level factor to uncover how the

SHRM process is influenced and has an im-
pact on the whole organization.

To fill this gap, this

study examines an

important organizational

factor, corporate

culture, to test its role in SHRM. As suggested
by Bowen and Ostroff (2004), corporate cul-
ture may act as an antecedent to SHRM or a
mediator to the link between SHRM and or-
ganizational performance. As a “higher-order
social structure” (Bowen & Ostroff, 2004, p.
205), corporate culture reflects the values
and beliefs embedded in an organization,
shapes people’s behavior, and, thus, affects
performance. Unlike prior studies regarding
culture as a moderator (Chan, Shaffer, &
Snape, 2004), this one proposes that corpo-
rate culture not only influences the imple-
mentation of SHRM, but is also directly in-
fluenced by the implementation of SHRM.
Moreover, since corporate culture reflects the
beliefs and values of the corporate leader, it
is directly linked to firm strategy, thus influ-
encing the adoption of SHRM.

According to social context theory (Fer-
ris, Hochwarter, Buckley, Harrell-Cook, &
Frink, 1999), corporate culture represents a
kind of organizational social environment
influencing the establishment of an organi-
zation’s HRM system. Different types of cul-
ture may have diverse effects on the adop-
tion of HRM practices with different
emphasis and orientations. For example,
group culture may facilitate the adoption of
HRM practices by emphasizing the reward of
employee loyalty and commitment to the or-
ganization. On the other hand, when SHRM
is implemented, the employees guided by
the HRM practices and policies may also
shape the corporate culture. Corporate cul-
ture will be strengthened, since the HRM
practices are designed to align employees’
values and attitudes with

corporate values

and strategic goals. Organizational outcome
is, thus, improved with the strengthened
corporate culture. To this end, corporate cul-
ture may act as a mediator, carrying over the
effects of SHRM on firm performance. De-
spite this theoretical argument, it is un-
known whether corporate culture, a key or-
ganizational factor, will more likely
influence the adoption of SHRM or be influ-

To fill this gap, this

study examines an

important

organizational
factor, corporate

culture, to test its

role in SHRM.

Human Resource Management DOI: 10.1002/hrm

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 779

enced by the implementation of SHRM, es-
pecially in the emerging context of China.
This study, then, will empirically test the role
of corporate culture in these two sub-
processes: the adoption and implementation
of SHRM.

The conceptual model of this study is il-
lustrated in Figure 1. To examine the role of
corporate culture in the SHRM process, we
tested two models: one with corporate cul-
ture as a determinant of SHRM and the other
with corporate culture as a mediator in the
SHRM-performance link. The fitness of these
two models will be observed and the media-
tion effects examined.

The fact that China was chosen as the
context for this study is particularly relevant,
since HRM in Chinese enterprises has been
going through continuous changes since the
opening up of China and the beginning of
business reforms in 1978. Throughout
China’s transition to a market economy, Chi-
nese firms have been facing strong competi-
tion in both the local and global markets.
Some firms are actively realigning their re-
sources, systems, and even their corporate
culture to fit market needs, while other
firms, especially state-owned enterprises, are
less market-oriented and still lag behind in
terms of upgrading their management sys-
tems (Wei & Lau, 2005). This economic and
business transformation provides researchers
with the opportunity to explore factors that

may influence the adoption and effective
implementation of SHRM in China.

Current literature indicates that SHRM is
being adopted in Chinese enterprises and is
having a positive impact on firm perform-
ance (Bjorkman & Fan, 2002; Ding & Akhtar,
2001, Wei & Lau, 2008), but there appears to
be no systematic study of factors, such as
corporate culture, affecting the SHRM
process in China. To understand why organi-
zational performance in China can benefit
from SHRM, there is a need to investigate
how SHRM is adopted and implemented
(Zhu, Cooper, De Cieri, & Dowling, 2005).
This study not only examines the effect of
different types of corporate culture on
SHRM, but also contributes to the under-
standing of the SHRM processes in an emerg-
ing economy context. Given that most cur-
rent studies about SHRM are conducted on
firms from advanced market economies, this
study contributes to the study of SHRM in a
different context (Tsang & Kwan, 1999).

Cultural Determinism and the
Adoption of SHRM

Corporate culture has been defined as the
basic assumptions and values of business
leaders (Denison, 1996). It refers to the un-
derlying values and beliefs held by business
leaders that serve as a foundation of business
management systems and practices exempli-

Human Resource Management DOI: 10.1002/hrm

FIGURE 1.The Conceptual Model of the Study: The Role of Corporate Culture in SHRM Process

780 HUMAN RESOURCE MANAGEMENT, Winter 2008

fying those basic principles (Denison, 1990).
Since strategic decisions are made by corpo-
rate leaders, there is a connection between
corporate culture and strategy. Corporate
culture is the core of a firm’s endeavor to im-
prove organizational effectiveness and a
source of competitive advantage (Barney,
1986). There are studies linking corporate
culture to organizational outcome (Denison,

1984, 1990; Kravetz, 1988; Smith,
Collins, & Clark, 2005). For ex-
ample, relying on both qualita-
tive and quantitative evidence,
Denison (1996) examined four
culture traits—adaptability, mis-
sion, involvement, and consis-
tency—and found that culture
has a positive impact on organi-
zational effectiveness. Examined
as one of several intangible orga-
nizational elements, corporate
culture was found to have a
strong impact on organizational
performance (Carmeli & Tishler,
2004). Recently, Zhou, Tse, and Li
(2006) studied a sample of Chi-
nese firms and found that a par-
ticipative culture plays a role in
the organizational change
process, influencing the subse-
quent performance of the firm.

A crucial component of the
social context of an organization,

corporate culture influences and is affected
by many organizational aspects, including
job performance, role expectations, and per-
ception about business practices (Hofstede,
Neuijen, Ohayv, & Sanders, 1990). According
to the competing values culture instrument
(Quinn & Spreitzer, 2001), corporate culture
can be classified into at least three types:
group culture, developmental culture, and
hierarchical culture. Group culture has a
people orientation, emphasizing the estab-
lishment of a family-like environment for
employees. A developmental culture empha-
sizes the entrepreneurial behaviors of em-
ployees and a commitment to innovation
and development. In such an environment,
which emphasizes a regular review of the
firm’s strategy and objectives, employees are

encouraged to take risks and acquire new re-
sources to innovate. Correspondingly, organ-
izations with a hierarchical culture pay at-
tention to the establishment of procedures
and emphasize rules and regulations.

Corporate culture reflects certain deeply
embedded patterns of management behav-
ior. Although some scholars regard culture
and strategy as synonymous (Greiner, 1983),
others argue that corporate culture precedes
strategy formulation (Saffold, 1988). Some
believe that strategic decisions are made as a
reflection of the mind-set of corporate lead-
ers (Schein, 2004). Since culture “defines the
way things are done,” it influences how busi-
ness leaders formulate their firm’s strategic
goals. And since SHRM represents a set of in-
ternally consistent HR practices based on
firm strategy, it is guided by firm strategy
and, hence, influenced by corporate culture.

Values and orientations implied by a cor-
porate culture are infused through the firm’s
strategy, as well as through managerial prac-
tices, such as HRM.

SHRM may act as a

medium for carrying over invisible corporate
values and beliefs to

employees. At this

point, corporate culture is linked to the
strategic process as well as to the organiza-
tional outcome. Following this logic, corpo-
rate culture is an antecedent of SHRM, which
transfers the effect of corporate culture onto
the performance of the firm.

H1: Corporate culture (whether group, develop-
mental, or hierarchical) has a positive effect
on the adoption of SHRM, and SHRM medi-
ates the culture-firm performance link.

SHRM Implementation and
Corporate Culture

Corporate culture is also a type of social con-
trol that identifies behaviors and attitudes
that are appropriate for an organization’s
members to display (O’Reilly & Chatman,
1996). Corporate culture research focuses on
understanding organizational identity and
the collective commitment it facilitates
(Schneider, 2000). The implementation of
HRM is a process through which messages
are communicated to employees about

SHRM may act as a

medium for carrying

over invisible

corporate values

and beliefs to

employees. At this

point, corporate

culture is linked to

the strategic

process as well as

to the organizational

outcome.

Human Resource Management DOI: 10.1002/hrm

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 781

which behaviors are important, expected,
and reinforced (Bowen & Ostroff, 2004). Em-
ployees in the same organization tend to
communicate and learn from each other
and, thus, exhibit similar patterns of behav-
ior under the influences of corporate policies
and procedures. These patterns of activities
and employee behaviors then lead to an en-
vironment in which most employees have
similar understandings and beliefs; hence,
the corporate culture is shaped.

The behavioral perspective of SHRM also
emphasizes the realization of a firm’s strate-
gic goals through appropriate employee be-
haviors (Jackson & Schuler, 1995; Wright &
McMahan, 1992). Certain HRM practices to
elicit and reinforce different employee be-
haviors and meet the requirements of differ-
ent strategies are needed. SHRM practices
and policies may create a situation where un-
ambiguous information is communicated to
employees regarding appropriate behavior
regarding the firm’s strategy (Bowen & Os-
troff, 2004, Tsui, Pearce, Porter, & Tripoli,
1997). When employees exhibit similar atti-
tudes and behaviors in the organization,
some patterns of behavior will be formed
and the corporate culture is nurtured.

The implementation of SHRM would
suggest that HRM policies and practices
should be designed according to the firm’s
strategy. As employees are mobilized to ex-
hibit certain behaviors along with the HRM
practices related to the firm’s strategy, they
must possess a common mind-set. For exam-
ple, if the firm intends to enhance its com-
petitiveness, innovation and development
would naturally be among the key strategic
objectives for achieving this in a turbulent
environment. Employees would be expected
and motivated to acquire new resources, ini-
tiate entrepreneurial activities, and identify
and solve problems in a proactive way. By so
doing, employees would have a shared un-
derstanding of the strategic intent of HRM
policies and procedures. As a result of these
shared understandings and beliefs, a certain
type of corporate culture would be nurtured
and reinforced.

Research also indicates that firm per-
formance can be enhanced if corporate cul-

ture can be cultivated to facilitate business
development and innovation (Klein & Sorra,
1996; Schneider, Gunnarson, & Niles-Jolly,
1994). People are likely to perform better in
the unthreatening and less distressing envi-
ronment of a firm having an HR policy ori-
ented toward caring for its employees. If the
firm’s HR policies are targeted at developing
systems and individuals with a change and
innovation orientation, a developmental
culture will be cultivated, which in turn al-
lows the firm to improve performance. Cor-
respondingly, in firms that are less aggressive
in business reform and discourage innova-
tion and entrepreneurship, a hierarchical
culture will be developed.

H2: The implementation of SHRM has a positive
effect on corporate culture (whether group,
developmental, or hierarchical), and culture
mediates the link between SHRM
and firm performance.

Methodology

Data Collection

The data for this study were col-
lected through a questionnaire
survey of executive managers in
China. The respondents were the
CEOs and HR and finance direc-
tors from the sample firms. Ques-
tionnaires were mailed to 586
firms, with each firm receiving a
set of two questionnaires: one for
the chief HR manager and one for
the CEO/finance manager. HR
managers provided the SHRM-re-
lated information, and the CEOs/finance di-
rectors responded to another questionnaire
related to basic business information and
performance indicators. Both instruments
included questions about corporate culture.

Of the 621 completed questionnaires
that were returned, 367 were from HR man-
agers and 254 from CEOs/finance managers.
The response rate was 53.0 percent, which is
good by survey research standards (Baruch,
1999; Roth & BeVier, 1998). After matching
the HR manager and the CEO/finance man-

People are likely to

perform better in the

unthreatening and

less distressing

environment of a

firm having an HR

policy oriented

toward caring for its

employees.

Human Resource Management DOI: 10.1002/hrm

782 HUMAN RESOURCE MANAGEMENT, Winter 2008

ager questionnaires, we obtained 223 usable
firms in the sample. The valid response rate
of the study was 38.1 percent.

Sample

The sample included firms with various own-
ership profiles, including state-owned enter-
prises, foreign-invested enterprises, and pri-
vate firms. Of the 223 firms, 66 (29.6%) were
state-owned enterprises, 43 (19.3%) were for-
eign-invested enterprises, and 106 (47.5%)

were private firms, and the re-
maining are shareholding firms
and others. These firms are lo-
cated all over China and cover
various industries. Manufacturing
firms accounted for 24 percent of
the sample; service firms ac-
counted for 40.8 percent. The av-
erage age of the firms was 14
years, with a standard deviation
of 11. The average number of em-
ployees of the sample firms was
1,264.

Measurement

The major constructs employed
in this study included SHRM, cor-
porate culture and firm perform-
ance. An 11-item instrument on
strategic human resource man-
agement was adapted from the
Strategic Human Resource Man-

agement Index developed by Huselid (1995)
and the Strategic Human Resource Manage-
ment Scale for Chinese businesses developed
by Zhao (2001). The HR managers were
asked to describe the extent to which their
firms have adopted these practices on a five-
point Likert scale, ranging from 1 = very low
extent to 5 = very high extent (see the Ap-
pendix for a list of the items). Cronbach’s re-
liability coefficient was calculated, and the
alpha value was .89, indicating acceptable
measurement reliability.

Corporate culture was measured by items
adapted from Quinn and Spreitzer (2001).
The competing value culture model by
Quinn and Spreitzer (2001) identified four

types of corporate culture: group, develop-
ment, hierarchical, and rational culture.
However, we employed only the first three
types of culture only in this study, for they
are particularly relevant to Chinese firms.
Chinese culture is characterized by collec-
tivism—that is, it has a long-term orienta-
tion with an emphasis on rules and order.
Hence, group and hierarchical culture can be
found in many Chinese firms (Liu, Zhang, &
Leung, 2006; Taylor, 2005; Wong, 1998). In
recent years, with business reforms and mod-
ernization, a developmental orientation has
led some Chinese firms toward more aggres-
sive competition (Lau, Tse, & Zhou, 2002). A
rational culture, however, features a short-
term orientation and quantitatively defined
jobs and structure, with an emphasis on in-
dividuals. Because of the incompatibility of
rational culture with Chinese culture, we did
not employ it in this study.

Both the HR managers and

CEOs/finance

directors were asked to assess their agreement
with some descriptions of the values and ori-
entations of management in their firms. Four
items were used to measure each of the cul-
ture scales. These items were rated on a five-
point Likert scale, ranging from 1 = very low
extent to 5 = very high extent. For justifying
the propriety of the aggregated culture meas-
ures and examining whether there was signif-
icant between-company variance in each
scale, three indices were calculated: intraclass
correlation coefficient [1] and [2] (ICC[1] and
ICC[2]) and within-group interrater reliability
(Rwg) (Bartko, 1976; James, 1982; James, De-
Maree, & Wolf, 1993). Results1 suggested
those scales could be meaningfully aggregated
to the group level. We calculated the means of
scores provided by HR and CEOs/finance
managers as the measure of corporate culture.
The reliability alpha values of the three cul-
ture scales were .83, .68, and .63, respec-
tively—quite similar to those of the original
scales by Quinn and Spreitzer (2001).

Prior research indicates that the subjective
evaluation of firm performance by senior
managers is highly correlated to objective
measures (Venkatraman & Ramanujam, 1986;
Wall et al., 2004). Perceptual assessment has
been adopted by many researchers as a proxy

Both the HR

managers and

CEOs/finance

directors were

asked to assess

their agreement with

some descriptions

of the values and

orientations of

management in

their firms.

Human Resource Management DOI: 10.1002/hrm

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 783

for measuring firm performance, which is
even a preferred choice in China because of
low reliability of objective financial perform-
ance disclosed by Chinese firms (Luo & Park,
2001, Peng & Luo, 2000). In this study, firm
performance was measured by four indicators:
net profit, new product development, effi-
ciency, and return on assets (ROA). These as-
pects were evaluated to capture a firm’s finan-
cial status and potential for innovation. The
CEOs/finance managers were asked to assess
the firm by comparing its performance with
the industry average during the year. All re-
sponses were measured using a five-point Lik-
ert scale. The alpha value for the scale was .75,
indicating acceptable reliability.

Statistical Method

Using LISREL 8.50 (Jöreskog & Sörbom,
1993), we conducted confirmatory factor
analyses (CFAs) to test the psychometric
properties of those multi-indicator con-
structs, which included all independent and
dependent variables. We first ran an overall
model with five latent factors and 27 indica-
tors. The five-factor model fit the data rela-
tively well (χ2(314) = 566.75, p < .05; compara- tive fit index [CFI] = .93, Tucker-Lewis index [TLI] = .92; root mean square error of ap- proximation [RMSEA] = .066) and demon-

strated a significant improvement from the
null model. (See Table I for details.)

For testing the discriminant validity of the
constructs, we compared the five-factor
model with the other four alternative models:
a three-factor model derived by combining
the items for the three types of culture into
one factor; a two-factor model derived by
combining the items for SHRM and the three
types of culture into one factor; a second-
order model in which SHRM and three latent
factors for culture at the first order were com-
bined into one second-order factor; and fi-
nally, a one-factor model combining all 27
items into a single factor. Results indicated
that all the alternative models did not fit as
well as the five-factor model. In addition, we
used Akaike’s (1987) information criterion
(AIC) to evaluate the relative fit of non-nested
models (Jöreskog & Sörbom, 1993) and found
that none of the alternative models fit as well
as the five-factor model. This indicates the
construct distinctiveness of SHRM, group cul-
ture, developmental culture, hierarchical cul-
ture, and firm performance. The fit indices of
these models are presented in Table I.

Table II reports the means, standard devi-
ations, and correlations of the major vari-
ables. SHRM is positively correlated with all
three types of culture (group culture, r =.34, p
< .01; developmental culture, r =.36, p < .01;

Human Resource Management DOI: 10.1002/hrm

χ2 df RMSEA CFI TLI

1. Null model 2501.33 351

2. Five-factor model 566.75 314 .066 .93 .92

3. Three-factor model 631.39 321 .090 .84 .82

4. Two-factor model 702.45 323 .112 .71 .68

5. Second-order model 592.98 319 .080 .87 .85

6. One-factor model 781.32 324 .141 .62 .56

Five-factor model: The model consisted of one 11-item SHRM factor, three four-item culture factors, and one four-item performance factor.
Three-factor model: All 12 items for three culture scales formed one combined factor.
Two-factor model: Items for SHRM and for culture scales formed one combined factor.
Second-order model: SHRM and three culture factors (at the first order) formed a second-order factor.
One-factor model: All items were combined as one latent factor.

T A B L E I Comparison of Measurement Models

784 HUMAN RESOURCE MANAGEMENT, Winter 2008

Human Resource Management DOI: 10.1002/hrm

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Culture as a Determinant of SHRM

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 785

and hierarchical culture, r =.16, p < .05). Group and developmental culture are posi- tively correlated to firm performance (r = .16, p < .05 for group culture, r = .28, p <.01, for development culture), while the correlation between hierarchical culture and firm per- formance is not significant. The correlation coefficient between SHRM and firm perform- ance is .32 (p < .01). The three types of culture correlate with each other as well (correlation coefficients range from .30 to .42, p < .01).

Data Analyses and Results Report

We employed LISREL 8.50 to test the relation-
ships among corporate culture, SHRM, and
firm performance. Structural equation model-
ing is an ideal technique to analyze our data,
given the multiple correlated independent
variables (IVs) and dependent variables (DVs)
in our study. Unlike in conventional meth-
ods, such as multiple regressions, some pre-
dictor variables needed to be controlled to
generate unique variance because of the IVs.

In LISREL, there is no need to introduce con-
trol variables, since the technique is to repro-
duce the real (observed) relationships among
the targeted IVs and DVs according to the par-
simonious structural model (Bollen, 1987).

We adopted Kelloway’s (1998) method of
examining mediation effects to test the two
mediated models with SHRM and corporate
culture as the mediator, respectively. Specifi-
cally, we tested not only the mediated model,
but also the partially mediated models by
adding the path(s) of IV(s) to performance to
the mediated model. The nonmediated mod-
els were further tested by removing the
path(s) of mediator(s) to firm performance
from the partially mediated model. By evalu-
ating model fitness, model comparison, and
changes in path-effect size, we could deter-
mine whether there was any mediation ef-
fect. Two sets of structural equation modeling
(SEM) analyses were conducted, separately,
for testing Hypotheses 1 and 2. Results for
testing the determinant role of corporate cul-
ture (Hypothesis 1) are shown in Table IIIa,

Human Resource Management DOI: 10.1002/hrm

DV SHR Performance

IV
Group Culture

Mediated model .32** —
Partially mediated model .32** .00
Nonmediated model .35** .11*

Developmental Culture
Mediated model .37** —
Partially mediated model .35** .25*
Nonmediated model .39** .31**

Hierarchical Culture
Mediated model .02 —
Partially mediated model .04 –.06
Nonmediated model .03 –.04

SHR
Mediated model — .41**
Partially mediated model — .32**
Nonmediated model — —

Model fit:
Mediated model: Chi-square = 585.45, df = 320, RMSEA = .074, CFI = .90, TLI = .89.
Partially mediated model: Chi-square = 578.81, df = 317, RMSEA = .072, CFI = .91, TLI = .90.
Nonmediated model: Chi-square = 584.02, df = 318, RMSEA = .074, CFI = .90, TLI = .89.

T A B L E I I I a

786 HUMAN RESOURCE MANAGEMENT, Winter 2008

and those for testing culture as the mediator
(Hypothesis 2) are given in Table IIIb.

Table IIIa presents the results for testing
the culture-SHRM-performance link. Accept-
able fit indices can be observed for the par-
tially mediated model. Its difference from the
mediated model is statistically insignificant
(∆χ2(∆df) = 6.64(3), p > .05), which indicates that
the paths from culture to firm performance
can be eliminated from the baseline model
(partially mediated model) without damage to
the model fit. In contrast, the comparison be-
tween the partially mediated model and the
nonmediated model demonstrates a signifi-
cant difference (∆χ2(∆df) = 5.21(1), p < .05), which suggests the path from SHRM to firm performance should not be removed. Accord- ing to the parsimony rule of evaluating SEM models, the mediation model is preferable. Hence, culture is an antecedent of SHRM.

By observing the change of effect sizes in
Table IIIa, we learn that the significant effect
(.11, p < .05, the nonmediated model) from

group culture to firm performance becomes
insignificant in predicting firm performance
(.00, p > .05, the partially mediated model)
after SHRM is introduced. Similarly, the ef-
fect from developmental culture to firm per-
formance becomes weaker (from “.31, p < .01” to “.25, p < .05”). In contrast, the effect of hierarchical culture on firm performance does not change with the introduction of SHRM. In addition, the mediation model demonstrates that both developmental cul- ture and group culture have positive effects on SHRM (.37, p < .01; .32, p < .01), while the effect of hierarchical culture is not signifi- cant. SHRM has a positive effect on firm per- formance (.41, p < .01). Given this evidence, we conclude that Hypothesis 1 is partially supported. SHRM plays a full mediation role between group culture and firm perform- ance, a partial mediation role between devel- opmental culture and firm performance, and no mediation role between hierarchical cul- ture and firm performance.

Human Resource Management DOI: 10.1002/hrm

Culture as a Mediator to SHRM-Performance Link

DV Group C Develop C Hier C Performance
IV

SHR
Mediated model .59** .64** .36** —
Partially mediated model .57** .61** .38** .37**
Nonmediated model .60** .68** .35** .39**

Group Culture
Mediated model — — — .07
Partially mediated model — — — –.01
Nonmediated model — — — —

Developmental Culture
Mediated model — — — .44**
Partially mediated model — — — .22
Nonmediated model — — — —

Hierarchical Culture
Mediated model — — — –.08
Partially mediated model — — — –.10
Nonmediated model — — — —

Model fit:
Mediated model: Chi-square = 612.45, df = 318, RMSEA = .078, CFI = .84, TLI = .81.
Partially mediated model: Chi-square = 600.44, df = 317, RMSEA = .076, CFI = .88, TLI = .86.
Nonmediated model: Chi-square = 613.75, df = 320, RMSEA = .076, CFI = .88, TLI = .86.

T A B L E I I I b

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 787

Table IIIb presents the results for testing
the SHRM-culture-performance link. None of
the three models fits perfectly well, since all
CFIs and TLIs are below the critical value—
that is, .90. In addition, model comparison
illustrates a worse fit of the mediated model
compared to the partially mediated model
(∆χ2(∆df) = 12.01(1), p < .05), which indicates that the path from SHRM to firm perform- ance should definitely be maintained. There- fore, the mediation model could not be sup- ported, meaning that corporate culture as a mediator of the SHRM-performance link could not be confirmed. Therefore, Hypoth- esis 2 was not supported.

To better understand the effect of culture
as an antecedent of SHRM, we further as-
sessed the total, direct, and indirect effects
among the four variables in SEM (Bollen,
1987; Fox, 1980). Following the instructions
of Kenny, Kashy, and Bolger (1998) for test-
ing the mediation, we decomposed the total
effects of the latent independent variable on
the dependent variable into direct and indi-
rect effects when running the full structural
model. This method helped to test the indi-

rect effect(s) from the IV(s) to the DV(s) (via
mediators). When the indirect effects were
significant—that is, the confidence level did
not contain zero—mediation was confirmed,
regardless of whether the total effect was sig-
nificant (Kenny et al., 1998).

The estimates of total, direct, and indi-
rect effects obtained from these SEM analyses
are listed in Table IV. Results show that group
and developmental cultures’ indirect effects
(.09 and .10, p < .05, via SHRM) on firm per- formance are significant, indicating the me- diating role of SHRM. In addition, the direct effect of group culture on firm performance is not significant, whereas the effect of de- velopmental culture on performance is sig- nificant. These results, again, indicate that SHRM served as a full mediator between group culture and firm performance and a partial mediator between developmental cul- ture and firm performance. The path dia- gram in Figure 2 illustrates the entire struc- tural model.

The structural model provided a good fit
(χ2(319) = 580.96, CFI = 0.91, TLI = 0.90,
RMSEA = 0.072). Three of the four direct

Human Resource Management DOI: 10.1002/hrm

DVs SHRM Firm Performance
IVs
Group Culture Directa .31** .01

Indirecta — .09*
Totala .31** .10

Developmental Culture Directa .35** .26**
Indirecta — .10*
Totala .35** .36**

Hierarchical Culture Directa .03 –.07
Indirecta — .01
Totala .03 –.06

SHRM

.29**

—

.29**

aNonstandardized estimated parameters, calculated by single sample method.

*p < .05; **p < .01.

T A B L E I V Summary of Direct, Indirect, and Total Effects (Culture as a Determinant)

788 HUMAN RESOURCE MANAGEMENT, Winter 2008

paths were significant: the effects of devel-
opmental culture on SHRM (.35, p < .01), group culture on SHRM (.32, p < .01), and SHRM on firm performance (.32, p < .01). The path from hierarchical culture to SHRM was not significant. Developmental culture has a significant effect on firm performance as well (.25, p < .01).

In summary, we found that corporate
culture acted as an antecedent of SHRM.
Both group and developmental culture had
a positive effect on SHRM, while the rela-
tionship between hierarchical culture and
SHRM was not significant. In addition, we
found that the effects of the developmental
and group cultures on SHRM and perform-
ance were different. The positive impact of
group culture on firm performance was suc-
cessfully transferred by SHRM, but develop-
mental culture still had some direct effect
on firm performance.

Discussion of Our Findings

This study examines the role of corporate
culture in the implementation of SHRM. We

propose that corporate culture facilitates the
adoption of SHRM, which has positive ef-
fects on firm performance. Alternatively,
SHRM may facilitate the cultivation of cer-
tain types of culture, which, in turn, have
positive effects on firm performance. Our
findings support the first proposition: that it
is more likely that culture acts as an an-
tecedent of SHRM. This is consistent with
Wei and Lau’s (2005) study about the deter-
minants of SHRM. The importance of HRM
to top management has been found to be
one of the determinants of the adoption of
SHRM in Chinese firms. The perceived im-
portance of HRM is actually a partial reflec-
tion of the firm’s values or corporate culture.
If a firm has an orientation toward strategi-
cally managing its human resources, it is
more likely that SHRM will be adopted.

Results of our study indicate that both de-
velopmental and group cultures facilitate the
adoption of SHRM, and SHRM has positive ef-
fects on firm performance. Moreover, devel-
opmental culture also has some direct positive
effects on firm performance. A firm’s perform-
ance can be enhanced by its adoption of

Human Resource Management DOI: 10.1002/hrm

FIGURE 2. Structural Model of Corporate Culture, SHRM, and Firm Performance

* p < .05; ** p < .01; *** p < .001.

+ The path coefficients as well as the significance level as indicated by * are listed in the figure.

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 789

SHRM or a developmental culture. For the
adoption of SHRM, an appropriate culture, ei-
ther developmental or group, may help.

The results of this study support the “cul-
ture determinism” argument that a good cul-
ture possibly leads to the adoption of effec-
tive management practices, such as SHRM,
that may benefit the organization. The
proposition that culture acts as a mediator of
the SHRM-performance link is not con-
firmed. Since developmental culture has a di-
rect effect on a firm’s performance, we con-
template that corporate culture—such as
group and developmental culture—not only
facilitates the adoption of SHRM, but may
also directly benefit the firm’s performance,

The different effects of developmental and
group culture have some practical implica-
tions for Chinese firms. In the transitional
economy of China, entrepreneurship and in-
novation implied by a developmental culture
may be very important, since such an orienta-
tion not only facilitates the development of
advanced management practices like SHRM,
but also helps improve the firm’s bottom line.
However, the people orientation of a group
culture helps only the adoption of SHRM,
while the rule orientation of a hierarchical cul-
ture is irrelevant to the development of SHRM.

Overall, our findings contribute to the
current study of the relationship among cul-
ture, SHRM, and firm performance. First, we
confirmed that corporate culture is an an-
tecedent of SHRM. Despite studies of various
functional factors as the determinants of
SHRM (Wei & Lau, 2005), little research has
focused on important organizational factors,
such as corporate culture. Moreover, most
prior studies examined corporate culture as a
moderator or mediator, overlooking its direct
effect on the adoption of SHRM. Given the
increased importance of corporate culture in
China, its influence on SHRM is worthy of
investigation. By adopting the competing
values culture model, we examined the role
of three types of culture on the adoption of
SHRM. We found empirical support for the
proposition that the design of SHRM prac-
tices is aligned with or based on corporate
culture. In other words, corporate culture fa-
cilitates the development of SHRM.

Second, responding to the call to go be-
yond the SHRM-performance link and fur-
ther investigate the causal relationship be-
tween SHRM and organizational outcomes
(Wright, Gardner, Moynihan, & Allen,
2005), our examination of corporate culture
as an antecedent or a mediator adds evidence
to the literature of SHRM adoption and im-
plementation. We found support for the per-
spective of “culture determinism”—that cor-
porate culture is an antecedent to the
adoption of SHRM—though a de-
velopmental culture also directly
affects organizational perform-
ance. Going beyond the content
of SHRM practices, our empirical
evidence adds support to studies
of the SHRM process, enriching
the social context view of HRM
(Ferris et al., 1999).

Third, we tested the relation-
ships in the context of China.
Given the dynamic business envi-
ronment of economic and enter-
prise reform in China, we propose
that one important condition of
SHRM adoption in China is the
institution of appropriate corpo-
rate cultures so as to improve firm
performance. Both developmental
and group cultures might provide
some impetus for firms to develop
SHRM, which would enhance the
competitiveness of Chinese firms.

This reminds us of the impor-
tance of building up corporate
culture in Chinese enterprises.
Our research findings suggest that some cor-
porate culture have positive effects on firm
performance, and the effects of certain cul-
ture were indirect (i.e., through the imple-
mentation of effective HRM practice). A
firm’s efforts to establish a certain type of cor-
porate culture eventually pays off in terms of
better performance. Corporate culture is crit-
ical to the adoption of sophisticated manage-
rial practices such as SHRM. However, it is
also worth noting that a hierarchical culture
is irrelevant to both SHRM development and
firm performance. Although the three types
of culture are somewhat correlated, hierarchi-

The results of this

study support the

“culture

determinism”

argument that a

good culture

possibly leads to the

adoption of effective

management

practices, such as

SHRM, that may

benefit the

organization.

Human Resource Management DOI: 10.1002/hrm

790 HUMAN RESOURCE MANAGEMENT, Winter 2008

cal culture may have some merits in the Chi-
nese context, which is characterized cultur-
ally by a high power distance. A hierarchical
culture is neither effective in promoting the
development of SHRM nor helpful in en-
hancing firm performance.

Chinese firms are undergoing tremen-
dous environmental changes and business
reforms. One of the goals of enterprise re-
form is to establish effective corporate cul-
tures while upgrading internal management
systems. Building an appropriate and strong
culture is a fundamental way to modernize

Chinese business. It is critical for
firms initiating effective manage-
ment practices such as SHRM to
implement

strategic changes in

response to heightened competi-
tion. Chinese firms are benefiting
from these activities. Considering
the long-term effects of corporate
culture, it is necessary for Chinese
firms to take more initiative in
building an appropriate one.

Our research findings have an-
other practical implication. Since
corporate culture reflects the
mind-set of top leaders of the firm,
it is critical for top management to
promote any new, advanced man-
agerial practices, such as SHRM, by
accepting and merging them into
the philosophy of business man-

agement. Given the novelty of SHRM, it is dif-
ficult for most Chinese firms to adopt and im-
plement it without the support of top
management (Wei & Lau, 2005). HR execu-
tives in many Chinese firms complain that the
failure to adopt management innovations
such as SHRM stems from lack of support from
top management. If the values and beliefs of
top management can become aligned with
what is required for the establishment and ap-
propriate functioning of SHRM, the firm can
ultimately benefit from implementing it.

Study Limitations Point to the Need
for Future Research

This study examines the role of corporate
culture in the SHRM process. Corporate

culture acts as one determinant of SHRM,
and different cultures have different ef-
fects. We have examined group culture, de-
velopmental culture, and hierarchical cul-
ture in this study. Future studies, especially
qualitative studies, are needed to examine
why these different cultures influence busi-
ness initiatives such as SHRM. For example,
we have found that developmental culture
has direct effects on both SHRM and firm
performance, but group culture has direct
effects on SHRM only. Such different roles
of culture in Chinese firms need to be fur-
ther investigated.

Our study has the common limitation of
all cross-sectional studies. We are unable to
test the reciprocal relationship between
SHRM and corporate culture based on the
data collected contemporaneously. Future
longitudinal studies are needed to capture
the causal relationship of SHRM and corpo-
rate culture in various Chinese enterprises
and the corresponding impact on firm per-
formance. As Chinese firms upgrade their
human resource management systems with
more extensive business reforms and gradu-
ally build corporate cultures, further studies
on the interactions of SHRM and corporate
culture may provide evidence on the internal
process-related determinants of firm per-
formance in China. Comparative studies of
Chinese firms with different historical back-
grounds and from diverse industries would
also be helpful for both theory development
and the practice of SHRM.

Another missing aspect is the impact of
the strength and a change of corporate cul-
ture. According to the life-cycle theory of
cultural evolution (Schein, 1985), cultural
development and strength interact with cor-
porate development. The dynamic process of
cultural development and its impact on
SHRM and corporate effectiveness needs to
be further examined in future research. Fur-
ther studies are particularly needed to ex-
plore the relationships among these three
types of culture. With Chinese business re-
form and heightened market competition,
the evolution of corporate culture from hier-
archical to group and developmental is more
likely to occur in Chinese firms. Longitudi-

It is critical for firms

initiating effective

management

practices such as

SHRM to implement

strategic changes in

response to

heightened

competition.

Human Resource Management DOI: 10.1002/hrm

Corporate Culture in the Process of Strategic Human Resource Management and Chinese Enterprises 791

nal research may be helpful for following up
on such changes. In addition, our study fo-
cused only on developmental, group, and hi-
erarchical cultures. Other types of culture,
such as innovative, rational, or bureaucratic,
may exist or coexist in Chinese firms. An ex-
amination of the effects of different kinds of
corporate culture on SHRM practices would
create a more comprehensive picture of the
role of corporate culture and its effects on
SHRM and firm performance.

Moreover, factors besides corporate cul-
ture that may influence the adoption of
SHRM and its effects on performance need
to be further identified. For example, other
organizational capabilities, such as knowl-
edge management and learning, and insti-
tutional factors may affect the adoption
and implementation of SHRM. Given the
unique institutional environment of China,
future studies are needed to test the rela-
tionships among corporate culture, SHRM,
and firm performance in other contexts and

to generalize the conclusions to other cul-
tural settings.

Drawing from the literature of corporate
culture and social context theory of SHRM,
this study developed a model suggesting that
corporate culture may function as an an-
tecedent to the adoption of SHRM. Alterna-
tively, corporate culture may mediate the re-
lationship between SHRM and organizational
performance. The results of the study support
the notion that a developmental or a group
culture facilitates the creation of SHRM,
which has a subsequent positive impact on
firm performance. This research contributes
to the SHRM literature by uncovering the role
of different types of corporate culture in the
development of SHRM. It also has significant
implications for management practice, espe-
cially in the field of SHRM development and
culture management—both of which are crit-
ical for firms gaining competitive advantage
through strategically managing human re-
sources in China.

Human Resource Management DOI: 10.1002/hrm

LI-QUN WEI, PhD, is an associate professor in the management department of Hong Kong
Baptist University. Her research interests include strategic human resource management,
Chinese business strategies, and top management teams. She is active in both teaching and
research in the field of strategic HR and international strategies of firms from emerging
economies, especially China. Her articles have been published in the Journal of Interna-
tional Business Studies, the International Journal of Human Resource Management, Re-
search and Practice of Human Resource Management, and Asia Business and Management.

JUN LIU, PhD, is an associate professor in the OB and HR Department, School of Busi-
ness, Renmin University, P.R. China. He obtained his doctoral degree in management
from the Chinese University of Hong Kong in 2005. His research interests include lead-
ership, HR practice, psychological contracts, and organizational politics.

YICHI ZHANG, PhD, is a professor of management at the Guanghua School of Manage-
ment, Peking University. He obtained his bachelor’s, master’s, and PhD degrees from the
School of Economics, Peking University. His research interests currently focus on high-
performance work practices, the strategic link between employment relationship and
firm performance, and the effects of employee perceptions of HRM in China. His re-
search papers have appeared in leading Chinese academic journals.

RANDY KI-KWAN CHIU, PhD, is a professor of human resource management at Hong
Kong Baptist University. His academic research interests include management psychol-
ogy, professional ethics, and human resource management. His scholarly work, which
includes more than 90 articles, has been featured in various international academic jour-
nals and conference presentations.

792 HUMAN RESOURCE MANAGEMENT, Winter 2008

NOTE
1. Results for ICC[1], ICC[2], and Rwg calculation are

available from the first author.

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Strategic Human Resource Management (SHRM) (alpha = .89)

1. Match the attributes of managers to the strategic plan of the firm.
2. Identify managerial characteristics necessary to run the business in the long term.
3. Modify the compensation system to encourage managers to achieve long-term strategic objectives.
4. Design staffing plans to help implement business or corporate strategies.
5. Evaluate key personnel based on their potential to implement strategic goals.
6. Conduct job analysis based on what the job may entail in the future.
7. Conduct staff development programs designed to support strategic changes.
8. HRM department is able to provide HR-related information for business strategic decisions.
9. There is HR planning in business, with clear and formal procedures.
10. Top managers are able to effectively communicate business goals and strategies to employees.
11. There is formal HR strategy in the business.

Corporate Culture

Group Culture: (alpha = .83)
1. Our firm is a very personal and people-oriented place.
2. The glue that holds our firm together is loyalty and tradition.
3. Our firm emphasizes human resources.
4. The head of our firm is generally considered to be a mentor, sage, or a father or mother figure.

Developmental Culture: (alpha = .68)
1. Our firm is a very dynamic and entrepreneurial place.
2. The glue that holds our firm together is commitment to innovation and development.
3. Our firm emphasizes growth and acquiring new resources.
4. The head of our firm is generally considered to be an entrepreneur, an innovator, or a risk taker.

Hierarchical Culture: (alpha = .63)
1. Our firm is a very formalized and structured place.
2. The glue that holds our firm together is formal rules and policies.
3. Our firm emphasizes permanence and stability.
4. The head of our firm is generally considered to be a coordinator, an organizer, or an administrator.

Items Measuring SHRM and Corporate CultureA P P E N D I X

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