Research on evaluation of enterprise project culture based on Denison model

Journal of Industrial Engineering and Management JIEM, 2015 – 8(3): 909-927 – Online ISSN: 2013-0953 – Print ISSN: 2013-8423 http://dx.doi.org/10.3926/jiem.1400 Research on Evaluation of Enterprise Project Culture Based on Denison Model Yucheng Zeng1, Maozhu Jin1*, Can Guo2, Zhiwei Zhang1 1Business School, Sichuan University (China) 2Deyang Business Enterprise, Sichuan University (China) zeng[email protected], *Corresponding author: jinmao[email protected], [email protected], [email protected] Received: January 2015 Accepted: June 2015 Abstract: Purpose: The purpose of this paper is to build enterprise project culture evaluation model and search for the best evaluation method for Chinese enterprise project culture on the basis of studying and drawing lessons from enterprise culture evaluation theory and method at home and abroad. Design/methodology/approach: Referring to the Denison enterprise culture evaluation model, this paper optimizes it according to the difference of enterprise project culture, designs the enterprise project culture evaluation model and proves the practicability of the model through empirical. Finding: This paper finds that it's more applicable to use the Denison model for enterprise project culture evaluation through the comparative analysis of domestic and foreign enterprise culture evaluation theory and method, the systematic project culture management framework of Chinese enterprises has not yet formed through empirical research, and four factors in enterprise project culture have important influence on project operation performance improvement. Research limitations/implications: The research on evaluation of enterprise project culture based on Denison model is a preliminary attempt, the design of evaluation index system, -909- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 evaluation model and scale structure also need to be improved, but the thinking of this paper in this field provides a valuable reference for future research. Practical Implications: This paper provides the support of theory and practice for evaluating the present situation of enterprise project culture construction and analyzing the advantages and disadvantages of project culture, which contributes to the "dialectical therapy" of enterprise project management, enterprise management and enterprise project culture construction. Originality/value: The main contribution of this paper is the introduction of Denison enterprise culture model. Combining with the actual situation of enterprises, this paper also builds the evaluation model for enterprise project culture, which is helpful to promote the construction and development of Chinese enterprise project culture. Keywords: enterprise culture, project culture, evaluation model 1. Introduction In the background of the comprehensive transformation and upgrading of Chinese economic society, to adapt the demand for marketization and internationalization of the new situation, more and more Chinese enterprises transform the original enterprise management mode by introducing modern enterprise project management. "According to the survey, now 91.1% of the enterprises are adopting the Enterprise Project Management (Enterprise Project Management, EPM) model" (Zeng & Wang, 2014). However, "project management is a systematic management idea and mode which can inevitably has great impact on the enterprises’ original cultural characteristics in the process of introducing" (Li, 2010). These lead to the uncoordinated phenomenon between project management and enterprise management, this is actually "the conflict and collision of management culture or pattern." So, many enterprises gradually realized that "if they don't consider introducing the culture environment into project management, they are afraid not to succeed" (Chen, 2004). "When applying or introducing project management, enterprises should treat it as a culture rather than a management mode" (Sun, 2014). At the same time, many companies have also realized that "the core of competition among enterprises is culture" (Wang, 2014). As a result, "they should analyze the cultural differences between east and west to have a dialectical treats." This paper argues that the best way to analyze the cultural differences is just like the enterprise culture that is evaluating the culture of enterprise project, diagnosing the present situation of the project culture development, analyzing its advantages and disadvantages, and having a system cognition and rational judgment of project culture, to achieve the "dialectical treats" of project management, enterprise management and construction of project culture. -910- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 Mainly based on literature in CNKI, this paper found that at present scholars mainly focus on the application of the enterprise project management, the researches about construction of enterprise project culture are few, and research literatures about the enterprise culture project evaluation are less. As a result, many companies do not know how to effectively evaluate their own project culture. Wang (2014) pointed out, "how to make the project culture play the biggest role for improving the brand effect and economic benefit of enterprises deserved our in-depth exploration and thinking and then find some effective and feasible ways to provide the internal motivation for the healthy development of the enterprise." This is the main problem which needs to solve urgently. How to deeply learn about the current situation of the enterprise culture construction project and find the problems existing in it and suitable assessment method for Chinese enterprise project and help to form the unique enterprise project culture, which is of great importance to "explore the problems of strengthening project cultural construction" (Gao, 2013). This paper is on the basis of theoretical study to have a field survey and empirical research on China's enterprise project culture by using quantitative analysis method. It tries to put forward suitable model and method for enterprises to carry out project culture evaluation, providing meaningful reference for enterprise culture evaluation. 2. Practical and Theoretical Backgrounds According to the enterprises they worked at, Dong (2009) think that in the process of project culture construction in some enterprises, the enterprise culture is still floating on the surface and not taking root in project department. Thus the project culture can’t play a proper role. Dong also thinks that if people don’t strengthen the project culture construction, the fault of enterprise culture will appear. Xie and Xu (2007) think that if the project management methods are used more widely and deeply, the impact of the cultural characteristics of the enterprise will be deeper, and the range will be wider. At the same time, project management is faced with stronger resisting strength from the corporate culture. In recent years, the studies on project culture have received a lot of attention. But there are few researches on project culture. Only Sun (2008) have done some try. Firstly, Sun summarized the studies of project culture done by national and international experts. He thinks that these studies have two features. One is that the project culture is a part of enterprise culture, it is studied based on enterprise culture. The other one is that these researches more likely belong to qualitative property, lack of quantitative evaluation of project culture achievements. Secondly, Sun also carried on exploration of evaluation of system establishment and evaluation of project culture. But his evaluation system is based on finance. It is not comprehensive and lack of some contents that can embody the project culture. And it is lack of practicability if combined with fuzzy comprehensive evaluation. -911- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 Today, experts and scholars at home and abroad do more research on corporate culture assessment theory, and it is lack of quantitative research on assessment of project culture (Wei, 2013; Su, 2014; Chen & Yu, 2005). But project culture is a mode of enterprise culture. As a result, we can draw lessons from the enterprise culture theory and method of evaluation for assessment of enterprise project culture. At present, the methods of foreign corporate culture assessment commonly used include OCP constructed by Chatman, OCQ constructed by Denison, measurement scale constructed by Hofstede and OCAI by Quinn and Cameron. The domestic influential corporate culture assessment scales include VOCS scale by Zheng (1990), corporate culture assessment scale constructed by Guanghua academy of Peking University's and economics and management academy of Tsinghua University's school. Based on the above theory and method of corporate culture assessment both at home and abroad, we can find that it is more applicable to use Denison model and scale to assess enterprise project culture. Through empirical research and case studies, Denison and Mishra construct OCQ. OCQ consists of 60 projects. Through participation, consistency, adaptability and sense of mission under the four dimensions of 12 cultural factors respectively designed five considerations of project and questionnaire to measure and reveal the content of enterprise culture (Denison & Mishra, 1995). 1Denision Model has three prominent features. Firstly, the model and scale received recognition from the vast number of experts and scholars, it has high reliability and good practicability. Secondly, compared to the other scales, it contains more cultural factors and measuring projects, which can reflect the content of the project culture and the status more minutely and profoundly. Thirdly, the models and scales are well-operate, they can find the advantages and disadvantages of project culture construction through measurement and provide suggestions for the project team to improve project performance. Thus this paper chooses Denison model and scale as the essential theoretical foundation of the evaluation of enterprise project culture. 3. Study Design Enterprise project culture evaluation model of this study was modeled with Denison culture model and OCQ scale models, and referred to the study of experts and scholars at home and abroad in the field of enterprise culture assessment, and was combined with the characteristics of Chinese culture of enterprise projects to optimize Denison culture model, such as increasing the content of project management in order to build the project evaluation model and scale which suit for Chinese enterprises and cultural. -912- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 3.1. Assessment Dimensions and Indicators Identified This paper fully considered the cultural characteristics of enterprise projects when designing enterprise culture project evaluation indicators, and it increased four aspects, including project management, project responsibilities, project internal control and project risk management. Firstly, the project risk management is the most important in enterprise project management. Enterprise risk management and control capabilities have a crucial influence on the introduction of enterprise strategy capital and stocks that were listed, and enterprise must implement a comprehensive risk management in the daily operation of the project process in order to enhance their risk management capability. Therefore, this article added the project risk management indicators to consistency dimension to evaluate the project staff’s recognition and enforcement status for project risk management. Secondly, internal project control is that the enterprise project team controls the project's operational risk. Enterprises control the systemic risk and non-systematic risk in project management process through various systems to ensure that enterprise projects are mobile, safe and profitable. Therefore, this article added the internal control indicators to consistency dimension to evaluate the project staff’s recognition and enforcement status for internal project control. Thirdly, project governance is that enterprise project team adjusts the project strategy and direction according to the changes of internal and external environment, and establishes project governance mechanisms to deal with the adverse effects of climate change. Therefore, this article added the project governance indicators to consistency dimension to evaluate the project staff’s recognition and enforcement status for project governance. At last, project responsibility is that enterprise project team considers project objective and business goal as a starting point during the operation of the project and have a strategic vision, oppose speculation, conflict huge risk, and adhere to the road of sustainable development. Therefore, this article added the project responsibility indicators to consistency dimension to evaluate the project staff’s recognition and enforcement status for project responsibility. The model of this article eventually includes 4 dimensions, which are participation, consistency, adaptability and mission and 12 measure indicators, including project authorization, project teamwork, project human resources, project culture construction, project internal control, project risk management, project reform and innovation, project customer-oriented, project governance, project objectives vision, project core values and project responsibility. In this paper, five Likert scale score, and 1 is strongly not to agree, 2 shows a comparatively not to agree, 3 representatives it cannot be determined, 4 is more favor, 5 representatives strongly agreement. The enterprise employees who participated in the survey give an objective evaluation for each question item according to the actual situation of their enterprises and their own understanding of the project, and specific indicators are shown in Table 1. -913- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 Dimensions Factors Measuring contents Participation Project authorization 1. The project team's decision-making is always based on adequate information sharing and communication 2. When justified, I can safely make a decision acts within the scope of their duties 3. Project staff can participate in decision-making and believe that they can have a positive impact 4. Business project planning has continuity, and everyone can participate in it Project teamwork 5. The project team actively encourage cooperation between the different projects within the enterprise 6. Better coordination between different levels within the project 7. Coordination of different projects is not difficult 8. The completion of the project work is primarily through teamwork, rather than hierarchical business and management 9. Project employees generally have internal teamwork spirit Project human resources 10. Most employees can actively work 11. Project staff can get opportunities of learning and training to improve the ability 12. The ability of project staff is seen as a competitive advantage and an important source 13. The quality and ability of project staff have a continuous improvement under the help of the project team Consistency Project culture construction 14. Project team formed a clear and consistent values to influence employees' work and behavior 15. The project team has an unique management style and management methods 16. Project group attaches great importance to cultural projects and cultural activities 17. Project staff understand and agree with the corporate culture project 18. The project team has a set of standard employee behaviors Project internal control 19. The related systems of projects and strategic objectives coincide with operating principles 20. Project system is quite authoritative 21. Project system executes smoothly and has few exceptions 22. The design of project-related operational processes is scientific and rational 23. The reward system of this project is unanimously approved and play an active role Project risk management 24. The importance of risk management within the project has been highly noticed consistently 25. Project staff agree and comply with project risk management ideas and code of conduct 26. Awareness of project risk management to be fully reflected in the business 27. The project team developed a comprehensive risk prevention and response measures Adaptability Project reform and innovation 28. The way of work is very flexible and easy to change 29. The project team encourage and support innovative activities and have the courage to take risks 30. Project staff continue to adopt new and advanced methods of work 31. The project team will usually adopt or introduce some new and improved ways of working -914- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 Dimensions Factors Measuring contents Adaptability Project customeroriented 32. Customer comments and suggestions often lead the project team do some reforms and adjustments 33. Project team insisted on the idea of customer-first 34. Project staff have deep understanding of the client's wishes and needs 35. The project team provides customers with dedicated service and always adhered to the interests of customers first Project governance 36. The business strategy of the project team forces other competitors to change its strategy or direction 37. The project team understands and adapts to the changes of the various aspects of the external environment 38. The project team is good at building and improving the changes of the internal and external environment 39. The project team is good at dealing with a variety of internal and external environment changes Mission Project objectives vision 40. The project team developed a long-term goals and strategic direction 41. Objective vision of the project team gets consensus unanimously 42. Objective vision of the project team provides guidance and generate incentives 43. Project managers have long-term vision and focus on the growth of staff 44. Keep track of the achievement of stated objectives and constantly strive to go ahead Project core values 45. The project team has a clear purpose and idea 46. Project managers can strictly guide practice according to the project purpose 47. Project staff can understand the project purpose and apply to the actual project work 48. Project aims are moral standards that measure the right and wrong behaviors of the project staff Project responsibility 49. Project team adheres to the "people-oriented", and the road of sustainable development 50. The project team take achieving their overall strategic goals as their mission 51. The project team developed an objective vision coinciding with the overall goal of enterprise 52. Projects maintain that the internal and external environment develops harmoniously in the process of operation 53. Project managers have long-term vision and oppose speculation and huge risks Table 1. Enterprise Cultural Assessment Scale Project 3.2. Sample Data Collection The survey objectives are from different enterprises employees of Sichuan, Yunnan, Chongqing, Hunan, Shenzhen and Zhejiang, etc., and these enterprises covers eastern, central and western of China, and these companies have regional and local characteristics to ensure the reliability and validity of the sample data. The 240 survey questionnaires were returned 180, excluding 43 invalid questionnaires whose option has the obvious regularity or the data is -915- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 imperfect and conflicting, and 137 valid questionnaires were recovered, and the effective response rate is 57.08%. Sample constituting is shown in Table 2. Classification Number Percentage (%) Sex Male 52 37.96% Female 85 62.04% Age Below 30 years old 106 77.37% 30～39 20 14.6% 40～49 7 5.11% Above 50 years old 4 2.92% Educational background College and below 4 2.92% Bachelor (including double degree) 81 59.12% Master and above 52 37.96% Time to join the enterprises Less than 1 year 36 26.28% 1～3 years 45 32.85% 3～5 years 32 23.36% 5～10 years 13 9.49% More than 10 years 11 8.03% Title Employees 100 72.99% Head of Department 21 15.33% Vice manager/ Dept. vice manager 9 6.57% Manager/Dept. Manager 7 5.11% Table 2. Samples Overview 3.3. Data Analysis 3.3.1. Reliability Analysis Reliability analysis is mainly used to analyzing the reliability of the scale of the questionnaire. This paper took Cranach Alpha for reliability analysis in SPSS19.0. Cronbach Alpha is used to computing consistency reliability, many experts believe that the higher the reliability coefficient is, the better the reliability scale is. And when reliability coefficients above 0.8, it means that reliability is very good. When reliability coefficient is within the range of 0.7 to 0.8,it is acceptable and when below 0.7, the scale should be revised and new test should be done (Bagozzi & Yi, 1988). -916- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 It can be seen from Table 3, the Cronbach Alpha values of various dimensions and their following factors are all above 0.7, indicating all dimensions and factors could well reflect the content of the project culture and high reliability for all indicators. Dimensions and factors Has been deleted Cronbach's Alpha value Participation dimension of the total table 0.931 Project authorization reliability factor analysis .777 Project teamwork reliability factor analysis .824 Project human resource reliability factor analysis .842 Consistency dimension of the total table 0.933 Project culture construction reliability factor analysis .868 Project internal control reliability factor analysis .867 Project risk management reliability factor analysis .844 Adaptability dimension of the total table 0.930 Project reform and innovation reliability factor analysis .851 Project customer-oriented reliability factor analysis .851 Project governance reliability factor analysis .845 Mission dimension of the total table 0.935 Project objectives vision reliability factor analysis .852 Project core values reliability factor analysis .833 Project responsibility reliability factor analysis .883 Table 3. Project cultural evaluation dimensions and Cronbach Alpha coefficient of factor 3.3.2. Validity Analysis Validity Analysis is used to test the degree that the scale questionnaire can accurately measure the required factors and characteristics (Wu, 2003). In this paper, we measured the validity by factor analysis. Before factor analysis, we generally use Bartlett Test of Sphericity and KaiserMeyer-Olkin to evaluate whether the scale questionnaire is suitable for factor analysis or not. Based on previous studies, when Bartlett value is comparatively large, and the corresponding probability value P is less than a given significance level, the correlation between the variables is relatively good, the variables are suitable for factor analysis; On the contrary, they are not suitable. For KMO test, the value is more close to 1, the higher correlation they have, and they are suitable for factor analysis; on the contrary, they are not suitable. Generally speaking, when KMO test value is above 0.6, and factor load coefficients for all projects are greater than 0.5, it can be analyzed by using factor analysis method. As is shown from Table 4, KMO value of each dimension is very close to 1, this indicates that they have more common elements among the variables, and it is suitable for factor analysis; -917- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 2. This paper develops the scale that is suitable for Chinese enterprise project culture evaluation. Referring to the research results of experts and scholars of OCQ scale and combining with the actual situation of Chinese enterprises, this paper deeply studies the enterprise project cultural features, connotation etc. it teases out 12 factors in the light of Chinese enterprise project cultural particularity, and forms the scale that is suitable for Chinese enterprise project culture evaluation, which will provide a new tool for Chinese enterprise project culture construction. 3. This paper conducts the empirical study of Chinese enterprise project culture evaluation. The model and scale is used to evaluate the current situation of Chinese enterprise culture construction, and it shows that the model and scale in the evaluation of Chinese enterprise project culture is effective and feasible through the empirical study. The evaluation study found that Chinese enterprises in the aspect of project culture construction need to be further improved and perfected. Meanwhile, several factors of enterprise project culture have important influence on the enhancement of project operational performance. Therefore, dynamic enterprise project culture evaluation has a pivotal role of enhancing project culture and enterprise culture core competitiveness of Chinese enterprises. 4. This paper provides a new theory and method for enterprise project culture construction. Enterprise project management is a new management mode of enterprise management. So, the enterprise project culture construction is the weak link of enterprise culture construction. The research of this paper will provide a new thought and method for the enterprise project culture construction to promote the enterprise project culture construction and improve the enterprise culture construction. Studies have shown that enterprise project culture is the source to gain enterprise core competitiveness through projects. It can effectively meet the requirements of marketization and internationalization of new situation. Only the construction of unique project culture could carry out the dislocation competition among enterprises, and ensures the healthy and sustainable development of enterprise. Therefore, if Chinese enterprises want to improve their own competitiveness in the fierce competition in the future, they must attach much importance to the construction of enterprise project culture. Although this paper has made some progress and results in the aspect of Chinese enterprise project culture evaluation, it still has some limitation, mainly the following three aspects: 1. From the perspective of research object, this paper studies the Chinese enterprise project culture evaluation model and scale. However, only a few experts both at home and abroad study enterprise project culture evaluation, and the references are less, so this enterprise project culture evaluation based on Denison enterprise model is a -924- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 preliminary attempt, and how to choose project culture evaluation indicators for Chinese enterprises remains to be further studied and improved. 2. From the perspective of sample selection, due to the constraints of region, time, money and many other conditions, the main objects participated in the evaluation are enterprise employees of Sichuan, Yunnan, Chongqing, Hunan, Shenzhen and Zhejiang in carrying out the evaluation questionnaire, so the coverage is not very wide. Meanwhile, the number of effective samples was 137 copies, the limited sample size will also have some impact on the precision of the results of statistical analysis. 3. From the perspective of model scale, in the design of Chinese enterprise project culture evaluation model scale, this paper mainly adopted the method of literature review and qualitative analysis to amend and perfect the existing and more mature model scale, so it is hard to avoid some problems existing in the construction of the structure of model scale, this also needs to be improved. Aiming at the above deficiency and limitation, it is good to improve and perfect the following aspects in future studies: 1. This paper did not conduct the expanding in-depth research and analysis on the impact of 12 factors of enterprise project culture on the project operational performance. So we can divide the enterprise project operation performance indicators into multiple evaluation factors in future studies, and further explore the relevance of enterprise project culture factors and each factor of project operational performance, and provide guidance for improving enterprise project culture construction and project operational performance. 2. On the choice of the index system, evaluation model and specific scale, the main reference is Denison enterprise culture trait model in this paper. This model contains abundant dimensions and indicators, which is able to present more comprehensive evaluation of enterprise project culture. However, this model also has its limitations. We can design more targeted model scale to develop project culture measurement, diagnosis and evaluation later. 3. Future studies should combine the qualitative and quantitative research, theoretical and empirical research organically. Meanwhile, it needs to integrate the advantages of different research methods, ideas and perspectives. This can not only enrich the theory of the field of enterprise project culture evaluation, but also enhance the practicability. -925- Journal of Industrial Engineering and Management – http://dx.doi.org/10.3926/jiem.1400 Acknowledgements The authors wish to thank the Major International Joint Research Program of the National Natural Science Foundation of China (Grant No. 71020107027), the National Natural Science Foundation of China (Grant No. 71001075), Central University Fund of Sichuan University with No.skqy201409 under which the present work was possible. References Bagozzi, P.R., & Yi, Y. (1988). On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16, 74-94. http://dx.doi.org/10.1007/BF02723327 Chen, C., & Yu, J. (2005). The cooperative relationship in the project construction. Enterprise Economy, 4, 61-62. Chen, Y. (2004). 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Quantitative assessment of enterprise culture values. Chinese Journal of Psychology, 32. Journal of Industrial Engineering and Management, 2015 (www.jiem.org) Article's contents are provided on a Attribution-Non Commercial 3.0 Creative commons license. Readers are allowed to copy, distribute and communicate article's contents, provided the author's and Journal of Industrial Engineering and Management's names are included. It must not be used for commercial purposes. To see the complete license contents, please visit http://creativecommons.org/licenses/by-nc/3.0/. -927-