Corporate Culture:

It is the collection of beliefs, expectations, and values learned and shared by a

corporations’ members and transmitted from one generation of employees to another.

Corporate Culture has two distinct attributes:

 Intensity:
The degree to which members of a unit accept the norms, values or other culture content
associated with the unit. (depth)

 Integration:
The extent to which units throughout an organization share a common culture. (breadth)

Importance:
 Conveys a sense of identity for employees.
 Generates employee commitment to something greater than themselves.
 Adds to the stability of the organization as a social system
 Guide for appropriate behavior.

Creation of Organizational Culture

 Beliefs and values of the organization’s founder
 Societal norms of firm’s native/host country
 Problems of external adaptation and survival
 Problems of internal integration

Cultural Differences
Research on pace of life in various countries suggest that Westerners have fairly
precise measures of time and a stronger concern for punctuality than most other
people
– Mono-chronic style individuals focus on one thing at a time;
characteristic of USA
– Poly-chronic style individuals focus on several things at one time;
characteristics of Latin American countries
Dimensions of Cultural Differences
Research has shown that countries differ significantly in
– Interpersonal trust
– Power-distance
– Avoidance of uncertainty
– Individualism v. Collectivism
Artifacts/Symbols
Visible objects, actions, stories that represent the culture
- Most easily changed
- Rites, rituals, ceremonies
- Stories, myths, legends
- Symbols
- Language/jargon/gestures

Behavior Patterns
Shared ways of interacting, approaching a task
- Shared ways of responding to something new
Norms
- Socially constructed preferences
- Group expectations about how things should be done
Values
- Preferred states
- Feelings & beliefs about what’s good or right
Shared Assumptions
- Taken for granted
- Not conscious
 - Hard to change

Culture and Technology

In order to create a more innovative corporation, top management must develop an

entrepreneurial culture that is open to the transfer of the new technology into company
activities and products and services. The company must be flexible and accepting of
change. It should include a willingness to withstand a certain percentage of product
failures on the way to success.

Innovative organizations should have the following characteristics:

1- Private attitude towards change
2- Decentralized decision making
3- Informal structure
4- Interconnectedness
5- System Openness

According to Geert Hofstede's Model, culture has five dimensions

1. Power distance
Power distance measures how subordinates respond to power and authority. In high-
power distance countries subordinates tend to be afraid of their bosses, and bosses tend
to be paternalistic and autocratic. In low-power distance countries, subordinates are more
likely to challenge bosses and bosses tend to use a consultative management style.

2. Collectivism versus Individualism

In individualistic countries, people are expected to look out for themselves. Solidarity is
organic (all contribute to a common goal, but with little mutual pressure) rather than
mechanical. Typical values are personal time, freedom, and challenge.
In collectivist cultures individuals are bounded through strong personal and protective
ties based on loyalty to the group during one’s lifetime and often beyond (mirrored on
family ties). Values include training, physical condition, the use of skills. See Appendix 2
for comments on differences between American and Chinese society on this dimension.

3. Femininity versus Masculinity

Hofstede’s study suggested that men’s goals were significantly different from women’s
goals and could therefore be expressed on a masculine and a feminine pole.
Where feminine values are more important (Sweden; France, Israel, Denmark,
Indonesia), people tend to value a good working relationship with their supervisors;
working with people who cooperate well with one another, living in an area desirable to
themselves and to their families, and having the security that they will be able to work
for their company as long as they want.
Where the masculine index is high (US, Japan, Mexico, Hong Kong, Italy, Great
Britain), people tend to value having a high opportunity for earnings, getting the
recognition they deserve when doing a good job, having an opportunity for advancement
to a higher-level job, and having challenging work to do to derive a sense of
accomplishment.

4. Uncertainty avoidance
When uncertainty avoidance is strong, a culture tends to perceive unknown situations as
threatening so that people tend to avoid them. Examples include South Korea, Japan, and
Latin America.
In countries where uncertainty avoidance is weak (the US; the Netherlands; Singapore;
Hong Kong, Britain) people feel less threatened by unknown situations. Therefore, they
tend to be more open to innovations, risk, etc.

5. Long-term versus Short-term orientation

A long term orientation is characterized by persistence and perseverance, a respect for a
hierarchy of the status of relationships, thrift, and a sense of shame. Countries include
China; Hong Kong; Taiwan, Japan and India
A short-term orientation is marked by a sense of security and stability, a protection of
one’s reputation, a respect for tradition, and a reciprocation of greetings; favors and gifts.
Countries include: Britain, Canada, the Philippines; Germany, Australia