Case-2

Introduction

The backdrop to this piece of research is the period during which sovereignty was handed over from the UK to PR China in Hong Kong. The research took place in the period immediately before and the period following the handover in a government department that was going through an organizational change. The period was characterized by rapid change and uncer- tainty, along with a massive building programme. Because of this, the department in question had recog- nized a need for a project management system to be implemented, in the functional organization that currently existed, to cope with increased demand for performance. A matrix organizational structure was introduced and the research reported here looks at the issues involved in implementing such a change within the Hong Kong organizational environment. The system turned out to operate in such a way that the ‘old’ heads of the functional departments remained in

position but ‘younger’ professionals took over the role of project managers. The transition was not altogether smooth, and initially generated much discontent and con� ict. A number of principles are investigated in this research, including the issue of institutionalized con� ict, which is a characteristic of matrix organiza- tion, the organizational culture in which change took place, organizational commitment and issues of national culture, based around Hofstede’s theories. The latter were particularly interesting and raised a number of Hong Kong speci� c issues that had an important bearing on the change process, such as the concept of face, con� ict avoidance and the desire to maintain the status quo during a period of political change.

The objective of the research was to investigate the change process in a large, public sector organization in Hong Kong and to identify the key issues affecting the process. The paper reports on the factors affecting the change process and describes the nature of the reaction to change within this particular context. It seeks to identify issues that need to be addressed when

Construction Management and Economics (2001) 19, 669–673

NOTE Matrix organizational structure, culture and commitment: a Hong Kong public sector case study of change

STEVE ROWLINSON*

Department of Real Estate and Construction, The University of Hong Kong, Pokfulam Road, Hong Kong, PR China

Received 28 February 2001; accepted 10 May 2001

This paper reports on the impact of organizational change on a government department in Hong Kong. It focuses on the perceptions of professional personnel of the organizational culture developed in the depart- ment and its mismatch with their expectations. The commitment of the professionals to their organization was measured, and found to be limited solely to a level of continuance commitment. The results of the study are discussed and explained in part by reference to Hofstede’s cultural concepts of power distance and individualism, and by reference to traditional Chinese cultural values.

Keywords: Organizational change, organizational culture, commitment, matrix organization, cultural values

*Author for correspondence. e-mail: [email protected]

Construction Management and Economics ISSN 0144–6193 print/ISSN 1466-433X online © 2001 Taylor & Francis Ltd

http://www.tandf.co.uk/journals DOI: 10.1080/01446190110066137

considering change and organizational design. The methodology involved a survey using Hofstede’s (1984) VSM questionnaire, a second survey using Handy’s (1985) organizational culture questionnaire and the commitment questionnaires of Allen and Meyer (1990), together with interviews with respon- dents and a follow-up study of the implementation success of the change process. Hence, the study was triangulated and the results presented here distil the key research issues and � ndings that came from this particular piece of research.

Organizational culture

A number of organizational culture problems emerged in the research, which involved personnel from a construction-based professional department of the Hong Kong government. The department had only recently decided to change from a functional organi- zation to a matrix organization, in an effort to improve ef� ciency and effectiveness in a time of expanding workload and tight project deadlines. Respondents were well aware of the advantages that a matrix organ- izational structure could bring to the department’s project management system, and were keen to see the change work. However, the transition had not been immediately successful, and the following points emerged during the course of the research.

Matrix organization has been identi� ed as being particularly suited to construction project environ- ments: see Bresnen (1990) for example. Matrix has been de� ned as a vertical functional hierarchy overlain by lateral authority, in� uence or communication, i.e. a mixed organization (Knight, 1976). This structure leads to institutionalized con� ict which, if properly directed, should lead to a number of advantages, such as ef� ciency and � exibility in use of resources, tech- nical excellence of solutions, motivation and develop- ment of employees and the freeing of top management from routine decision making (Galbraith, 1973). However matrix organizations are most effective only when a particular organizational culture takes hold in the organization; this is described by Handy (1985) as a task culture, i.e. a tendency to see the task as the key issue in the organization and to adopt, � exibly, whatever means that are appropriate to accomplish the task. In this research this conjecture was explored by means of Handy’s organizational culture questionnaire (Handy, 1985, pp. 214–20) being distributed to a sample of 40 professionals, of various grades, randomly chosen from the department. This represented about 10% of the professionals employed at the time. The results of the survey are shown in Table 1, and this clearly highlights a mismatch between the aspirations

of the professionals and the culture of the organization in which they worked.

Upon completion of data analysis, 6–8 weeks later, follow-up interviews were undertaken with 10 of the respondents in order to discover the reasoning of the respondents and the sources of the mismatches between the preferred and observed cultures. When questioned in these follow-up interviews, the respon- dents correctly identi� ed the task culture as their preferred culture but, according to questionnaire responses and in subsequent discussion, it became apparent that the predominant culture of the organi- zation was a role culture, i.e. procedures and formal authority were seen as the mechanisms by which work was undertaken. This re� ected the way in which the department, and indeed the government, had operated traditionally under the colonial administration. Hence, a mismatch existed, as evidenced by both the ques- tionnaire responses and subsequent interviews. This was initially assumed to have stemmed from the fact that the organizational structure had changed recently, and that this change was taking time to bed in. However, on further investigation, it was found that other, cultural, factors had compounded the planned changes, and these are elaborated upon below.

During questioning, one cause of the problem was highlighted at the senior management level. It appeared that the previous divisional heads were reluctant to decentralize decision making, as required in the matrix organization, and instead adopted a policy of central- izing decision making at senior levels. Hence, the whole concept of a matrix was undermined by this reluctance to accept a fundamental precept of matrix organiza- tion, the decentralization of decision making (see e.g. Knight, 1976 and Galbraith, 1973). However, it was apparent that the department had been through a series of workshops in which the principles of matrix organ- ization had been expounded and discussed, and all levels in the organization had understood and accepted these principles. Thus, another force was identi� ed that might explain the situation. This reluctance to decen- tralize was rationalized by the respondents as a mani- festation of the concepts of power distance (Hofstede, 1984; Rowlinson and Root, 1996), and the tendency to acceptance or expectation of hierarchical structures

670 Rowlinson

Table 1 Results of survey of organizational culturea

Organizational culture Preferred culture Perceived culture

Role 4 33 Task 35 7 Person 1 0 Power 0 0

aDifference between preferred and perceived styles is signi� cant at 0.1% level based on chi-squared test.

with uneven power distributions. Hence, a cultural barrier to the effective implementation of matrix organ- ization was identi� ed, and this is a hurdle that cannot be overcome easily in a short time, such as the imple- mentation period in this case.

Issues such as ‘face’ (Westwood, 1992) are strong in Hong Kong culture. Face is a complex issue and dif� cult to describe and explain simply; but it has its roots in the concept of self. Tedeschi (1986) points out that private self refers to ‘mental events in one person that are inherently non-observable by another person’, while the public self entails behaviour that ‘is open to the observations of anyone’. The public self of the eastern cultures is ‘face’. The private self is that part of the self-concept of which only the individual is aware, while the public self is known to others. In a collectivist culture, such as is typical in China, the concept of ‘self’ is a situationally and relationally based concept (Ting-Toomey, 1988). In the Chinese cultural context, self is de� ned through an intersecting web of ‘social and personal relationships’. From a collectivist perspective, the self is never free. It is bounded by mutual role obligations and duties structured by a patterned process of give-and-take, and thus a set of reciprocal ‘face’ obligations exists. The outworking of ‘face’ is focused on lending role-support to the other’s ‘face’, while at the same time not bringing shame to one’s own ‘self-face’ in high context cultures, such as the Hong Kong Chinese culture. In such a cultural context a direct mode of communicating can be perceived as highly threatening and unsettling to one’s own ‘face’, and such cultures are seen as nur- turing a relatively indirect mode of interaction. (Gudykunst et al., 1988). Hence, such concepts and principles appear to be in contradiction to the concept of ‘institutional con� ict’ that characterizes matrix organization. In the typical matrix organization there is always a tension between the needs of the project and the needs of the functional organization. This tension needs to be negotiated until a balance is obtained. However, the concepts of power distance and ‘face’ militate against this negotiation taking place in a direct mode, as might be typical in a US organiza- tion. Similar issues were noted in Rowlinson et al. (1993) in that Hong Kong project managers were found, in general, to be more strongly relationship- motivated rather than task-motivated in their leader- ship styles. This cultural dissonance between organ- izational structure and culture also made the decentralization of decision-making dif� cult to achieve. Thus a barrier to effective implementation of a matrix organization can be seen to exist, and so had to be overcome in this change situation.

Commitment

The same group of professionals was questioned, at the same time, on the concept of commitment, using Allen and Meyer’s (1990) taxonomy of affective, normative and continuance commitment, and the results are reported in Table 2. Affective commitment (an emotional attachment to the organization) was found to be very weak – in fact, virtually non-existent – and normative commitment (based on acceptance of the organization’s set of values) was likewise weak. There was, however, a high score on the continuance commitment dimension (based on the idea that the costs of leaving the organization outweigh the oppor- tunity costs of staying). These results were somewhat surprising among a group of professionals, and are indicative of the existence of a rational-economic man psychological contract with the organization (Handy, 1985). It appears that Hong Kong professionals could be described as mercantile in their outlook, perhaps re� ecting the social origins of Hong Kong, and this contrasts with their UK counterparts as reported in Rowlinson and Root (1996): ‘Within the UK, the concept “professional” refers to more than the acqui- sition of a body of knowledge but also values in its application. The sociological approach to profession- alism and professions has viewed both concepts as having evolved from the medieval university system and craft guilds of Europe. In contrast, in Hong Kong, the professional structures having been imported rela- tively unchanged from the UK and have no corre- sponding cultural roots. This supports the idea of Hong Kong professionals being more mercantile in outlook.’

This was viewed as a further compounding factor in the implementation of change. Matrix organization emphasizes decentralization of decision-making and relies on individuals taking responsibility for task production. This entails a high degree of commitment to the organization’s values, normative commitment, and the acceptance of professional responsibility. This normative commitment appeared to be a missing link

Impact of culture on project management 671

Table 2 Results of survey of commitment levels of professionalsa

Type of commitment Mean Median Standard deviation

Affective 14.3 10 3.6 Normative 22.5 15 5.3 Continuance 43.7 39 8.8

aConcepts are measured on a scale of 1 to 7, with 1 indicating low levels of commitment and 7 indicating high levels, for eight vari- ables giving, for each scale, maximum scores of 56 and minimum scores of 8. Hence low levels of affective and normative commit- ment are evident, but continuance commitment is reasonably high.

in this case, but the questionnaire responses did not explain how this situation had arisen. Was it the case that the professionals only stayed with the department because the cost of leaving was greater than the cost of remaining, i.e. continuance commitment, and they felt no professional obligation to respond, or was it in fact the case that the apparently unsuccessful change had caused the ‘negative’ attitudes?

These questions were explored in follow up inter- views, and the root cause of the problem was identi� ed as the failure of the change of organizational structure to meet the professionals’ expectations and aspirations. Hence, given the anecdotal evidence in the interviews, the apparently unsuccessful change appeared to have caused the low levels of commitment to develop, or be perpetuated, and the mismatch between organizational structure, procedures and organizational culture was identi� ed as the key problem. Moving from directive management to a more participative style was seen as a major issue to be addressed, and some implications of this are discussed below. However, it may be the case that low levels of commitment are a normal character- istic of Hong Kong organizations; hence this proposi- tion requires further research.

Some points of detail

Hong Kong professionals scored highly on Hofstede’s power distance index (Rowlinson and Root, 1996), indicating the acceptance of inequalities and status differentials in Hong Kong. Also, Rowlinson and Root reported that Hong Kong professionals scored rela- tively low, compared with a UK sample, on Hofstede’s individualism index, indicating more collectivist atti- tudes and values. These � ndings have implications for decision-making styles, indicating that the western, problem-solving style that is typical of matrix organi- zations might have to give way to a more consensus based approach. This is reinforced by the � nding (Rowlinson and Root, 1996) that being consulted by one’s direct superior was not seen as important in a sample of Hong Kong professionals, and this was further reinforced by the view expressed by a number of interviewees that Hong Kong professionals are more ‘situation accepting’, and somewhat averse to western problem-solving styles. Fear of expressing disagree- ment with leaders was also a frequent worry for the Hong Kong sample, adding further weight to the argu- ments above.

Thus, the principle of deliberate con� ict on which matrix organization is based has some cultural disso- nance when applied in Hong Kong. That is not to say that matrix organization is rejected or that it will not work; rather, the implication is that the introduction

of matrix must be handled very carefully, and cultural norms and values taken into account in developing a culturally aware matrix organization. This can be addressed by making the matrix organization rather more formal than the classic matrix described by Galbraith and others, and by retaining some of the vestiges of the old role culture and functional organi- zation during the transitionary period. Change processes can be achieved only relatively slowly on a step by step basis in some circumstances, particularly when collectivism, power distance and ‘face’ are impor- tant factors.

Conclusions

This study has investigated the impact of change on a government organization in Hong Kong. The study has identi� ed that cultural barriers to change exist at both management and worker level. Initially, the problem that appeared to exist was a mismatch between the organizational culture as perceived by the workers and the organizational structure that was being imple- mented. However, this difference was actually symp- tomatic of other underlying cultural issues that were the main barriers to the successful implementation of change. The cultural dimensions as de� ned by Hofstede were investigated, and it was found that power distance and individualism were key issues that impacted upon the change process. On further re� ec- tion it became apparent that these issues could be attributed to deep-seated, traditional cultural values. Of particular interest was the concept of ‘face’ that has an impact on the way people perceive themselves, their roles and others’ roles. Given the nature of the change to a matrix organization, the principles of matrix appeared to generate a cultural dissonance within the work force. This became a serious barrier in imple- menting the change process. In addition, it was found that low levels of commitment to the organization existed in the work group. Again, this may well have stemmed from a cultural issue, based on history, which added to the effect of this lack of commitment. Without this commitment, the change process could not be undertaken quickly or effectively. Further work on the normal levels of commitment in Hong Kong organi- zations could shed further light on this aspect.

The outcome of the research has been to identify cul- tural issues that are important when implementing change within a Hong Kong Chinese organization. The importance of history and tradition has been high- lighted, and the need to develop commitment in order to facilitate change appears to be important. As a fur- ther note, the eventual change to a matrix organization has been successful, but the period over which the effec-

672 Rowlinson

tive change and bedding in took place was greatly extended compared with the original plans. With hind- sight, if the cultural issues inherent in the change had been identi� ed earlier it would have been possible to plan the change process more effectively, by taking into account these issues and allowing time for them to be discussed and assimilated by the workforce. Thus the following points have to be addressed if change is to be effective and successful in the unique, Hong Kong envi- ronment:

l change has to be culturally acceptable and promoted in a sensitive manner;

l commitment has to be built up in the group based upon relationships;

l the role of the group is highly signi� cant in successful change;

l colonial values derived from another culture still exist in Hong Kong, and so complicate the process of change and development.

References

Allen, N. J. and Meyer, J. P. (1990) The measurement and antecedents of affective, continuance and normative commitment to the organisation. Journal of Occupational Psychology, 63, 1–18.

Bresnen, M. (1990) Organising Construction, Routledge, London.

Galbraith, J. R. (1973) Designing Complex Organisations, Addison-Wesley, Reading, MA.

Gudykunst, W. B., Ting-Toomey, S. and Chua, E. (1988) Culture and Interpersonal Communication, Sage, Newbury Park, CA.

Handy, C. (1985) Understanding Organisations, 3rd, Edn, Penguin, London.

Hofstede, G. (1984) Culture’s Consequences: International Differences in Work-Related Values. Sage, London.

Knight, K (1976) ‘Matrix organisation: a review’. Journal of Management Studies, May, 111–30.

Rowlinson, S. M. and Root, D. (1996) The Impact of Culture on Project Management, Final Report to British Council, Hong Kong, Department of Real Estate & Construction, Hong Kong University.

Rowlinson, S. M., To, T. and Yuen, P. H. (1993) Leadership Style of Construction Managers in Hong Kong. Construc- tion Management and Economics, 11(6), 455–65.

Tedschi, J. (1986) quoted in Gudykunst, W. B., Ting- Toomey, S. and Chua, E. (1988) Culture and Interpersonal Communication, Sage, Newbury Park, CA.

Ting-Toomey, S. (1988) A face negotiation theory. In Kim, Y. and Gudykunst, W. (eds), Theory in International Communication, Sage, Newbury Park, CA.

Westwood, R. I. (1992) Organisational Behaviour – Southeast Asian Perspectives, Longman (Far East), Singapore.

Impact of culture on project management 673

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