CORPORATE CULTURE

Dr. Sahar SALEM

Lecture 7
 Understanding Culture and Cultural
Differences

• Geert Hofstede was one of the first to attempt to

develop a universal framework for understanding
cultural differences in managers’ and employees’
values based on a world-wide survey.
• Hofstede’s work focuses on ‘value systems’ of
national cultures which are represented by four
dimensions:
 Hofstede’s dimensions
Brief definitions and examples of countries:

• Power distance—deference to authority (e.g., the United States is

low, China is high)
• Collectivism–individualism—group orientation (e.g., the United
States is low, Russia is high)
• Uncertainty avoidance—risk aversion (e.g., the United States is low,
France is high)
• Relationship orientation (masculinity–femininity)—a focus on
people over material things (e.g., the United States is low and the
Netherlands is high on femininity/ relationship orientation)
• Confucian dynamism (long-term orientation)—a focus on the
future rather than the past and present (e.g., the United States is
low, Japan is high)
Hofstede's culture Values
 England

https://www.hofstede-insights.com/country-comparison/
 UK

indulgence
 Group 1
Define Corporate Culture
How important is the culture-person
fit?
 Definition of Culture
• . The key features of culture are as follows:
• • Culture is shared by the members of the organization.
• • Culture helps members of the organization solve and
understand the things that the organization encounters,
both internally and externally.
• Assumptions, beliefs, and expectations strongly
influence how people perceive, think, feel, and behave
within the organization.
• Organizational culture is the pattern of shared values,
beliefs, and assumptions considered to be the
appropriate way to think and act within an organization
 The importance of Culture
1. In a study of accounting firms, new employees whose
personalities meshed with the company were 20 percent
less likely to leave their jobs in the first three years than
those who did not fit as well.
2. Provides stability to an organization
3. Gives employees a clear understanding of “the way
things are done around here.”
4. Culture sets the tone for how organizations operate and
how individuals within the organization interact.
EX: you have when a receptionist tells you that “Ms. Dettweiler” will
be available in a moment, while at another organization you are told
that “Emma” will be with you as soon as she gets off the phone. It’s
clear that in one organization the rules are more formal than in the
other.
Quotes
• When Henry Mintzberg, professor at McGill
University and one of the world’s leading
management experts, was asked to compare
organizational structure and corporate culture, he
said,
• “Culture is the soul of the organization—the
beliefs and values, and how they are
manifested. I think of the structure as the
skeleton, and as the flesh and blood. And
culture is the soul that holds the thing together
and gives it life force.”
 The importance of Culture
• Consider the different cultures of Calgary based WestJet Airlines
and Montreal-based Air Canada. WestJet is viewed as having a
“young, spunky, can-do environment, where customers will have
more fun.” Air Canada, by contrast, is considered less helpful and
friendly. One analyst even suggested that Air Canada staff “tend to
make their customers feel stressed” by their confrontational
behaviour.
• Culture provides stability to an organization and gives employees a clear
understanding of “the way things are done around here.” It sets the tone for how
organizations operate and how individuals within the organization interact.
• Thus, it has an impact on the employees who work for the firm.
• An organization that expects employees to work 15 hours a day may not be one
in which you would like to work. An understanding of culture might help you
discover the firm’s expectations before you accept a job, or it might help you
understand why you like (or don’t like) the college or university you attend.
Corporate Culture I’m a Mac, and I’m a PC
• PC Workplaces:
- People would wear ties and skirts.
- They’d be punctual.
- Their days and working styles would be regimented and predictable.
- Employees would have their own cubicle offices, and anyone proposing an
“informal Friday” break from the dress code would be looked on with
suspicion.
o Mac workplace :
- Would function well in an open, warehouse-like space with a bike rack out
front.
- Flextime would be common—that is, people arriving earlier or later in the
morning depending on their preference and on the circumstances of their lives
(whether they have children, when they can avoid rush-hour traffic).
- they take responsibility for making sure they log a full workday.
- The attire would be casual and diverse. Maybe the boss wears jeans. Some
people would probably be annoying others with their loud music, but everyone
would force smiles and be tolerant.
12
Corporate Culture
• The flextime scheduling at Apple may make for a happier workforce, but only
until it happens that a project suddenly arises and needs to be executed
immediately, and one of the key participants has flex-timed and already left for
the day. The other team members are left, that means, to do his share of the
work.
• What about the bike racks outside? Everyone agrees that it’s great that the
Mac people are peddling to work, but only until a morning thunderstorm pops
up and no one can make it to the office.
• The point is there are advantages and drawbacks to every corporate culture.
• It’s hard to say that one is better than another (just like Macs work for some
people while others prefer PCs), but it’s certainly true that there are different
value systems beneath the distinct cultures.
• Anyone who has a management role in any organization will be expected to
have a grip on what values guide the enterprise and how they reflect in the
day-to-day life of people on the job. Further, some managers—and all
entrepreneurs—will not only need to apply guiding values; they’ll have to
select and create them.
13
Definitions of Corporate Culture
• “The shared beliefs top managers have in a company
about how they should manage themselves and
other employees, and how they should conduct
their business”;“
• “the pattern of shared values and beliefs that gives
members of an institution meaning and provides
them with rules for behavior in their organization.
• “a general constellation of beliefs, mores, customs,
value systems and behavioral norms, and ways of
doing business that are unique to each corporation,
that set a pattern for corporate activities and
actions, and that describe the implicit and emergent
patterns of behavior and emotions characterizing
life in the organization .” New York Review of Books,
December 16, 2004, 88. 14
What’s My Organization’s Culture?
• Managers’ job responsibilities include protecting
and promoting their organization’s culture.
• Fulfilling the responsibility requires determining
exactly what culture lives in the workplace. There’s
no secret decoding mechanism, but there are a
number of culture type indicators
• On the Apple side: sloppy, fun, warm, loose,
careless, resigned, informal, smart, creative, soft-
spoken, controlled, cool, and haughty.
• On the PC side: uptight, formal, reliable, demanding,
uncomfortable, determined, perfectionist, detail
oriented, disciplined, unconcerned with
appearances, and geeky.
15
Contrasting Organizational Cultures
 Group 2
How Organizational Cultures Form?
How Organizational Cultures Form
 Culture can be created in three ways
• First, founders hire and keep only employees who think and
feel the way they do.
• Second, they indoctrinate and socialize these employees to
their way of thinking and feeling.
• Finally, the founders’ behaviour acts as a role model,
encouraging employees to identify with the founders and
internalize those beliefs, values, and assumptions.
• When the organization succeeds, the founders’ vision is seen
as a primary determinant of that success. At that point, the
founders’ entire personality becomes embedded in the
culture of the organization.
 Culture can be created in three ways
• For example, Microsoft’s culture is largely a
reflection of its co-founder, chair, and chief
software architect (and former CEO), Bill
Gates. Gates is personally aggressive,
competitive, and highly disciplined.
• Those are the same characteristics often used
to describe the software giant he founded.
 Culture can be created in three ways
• IKEA founder Ingvar Kamprad grew up in a poor
farming area in Sweden where people worked hard and
lived frugally.
• He combined the lessons he learned growing up with
his vision of helping people live a better life at home by
offering them affordable, functional, and well designed
furniture. He named his company IKEA by combining
his initials plus the first letters of Elmtaryd and
Agunnaryd, the farm and village where he grew up.
The success of IKEA in expanding to more than 220
stores in 35 countries stems from Kamprad’s vision.
How does a company make sure
an applicant is right for the job?
• Applicants for entry-level positions in brand management at household
products maker Procter & Gamble (P&G) move through an exhaustive
application and screening process.
• Their interviewers are part of an elite group who have been selected and
trained extensively via lectures, videotapes, films, practice interviews, and
role plays to identify applicants who will successfully fit in at P&G.
• Applicants are interviewed in depth for such qualities as their ability to
“turn out high volumes of excellent work,” “identify and understand
problems,” and “reach thoroughly substantiated and well-reasoned
conclusions that lead to action.”
• P&G values rationality and seeks applicants who demonstrate that quality.
University and college applicants have two interviews andwrite a general-
knowledge test on campus before being flown back to head office for three
more one-on-one interviews and a group interview at lunch.
• Each encounter seeks corroborating evidence of the traits that the firm
believes correlate highly with “what counts” for success at P&G. 25
 Group 3

What are the Four Culture Typology?

Four Culture Typology
 Networked culture
(high on sociability, low on solidarity).

• Organizations with this type of culture view members as family and

friends.
• People know and like each other. People willingly give assistance to
others and openly share information.
• The major downside to this culture is that the focus on friendships can
lead to a tolerance for poor performance and creation of political
cliques.
• Unilever and Heineken are examples of companies with networked
cultures. Heineken, for example, has more than 60 000 employees but
retains the feeling of friendship and family more typical in small firms.
• The company’s highly social culture produces a strong sense of
belonging and often a passionate identification with its product.
• Family businesses can often have this type of culture, although not all
family businesses would have a networked culture.
Mercenary culture
(low on sociability, high on solidarity).

• Organizations with this type of culture are fiercely goal-focused.

• People are intense and determined to meet goals.
• They have a zest for getting things done quickly and a powerful sense of
purpose.
• A mercenary culture is not just about winning; it is about destroying the
enemy.
• This focus on goals and objectivity leads to a minimal degree of politicking.
• The major downside to this culture is that it can lead to an almost
inhumane treatment of people who are perceived as low performers.
• Enron, Mars, Campbell Company of Canada, and Komatsu Canada (the
Japanese heavy-equipment manufacturer) have classic mercenary
cultures.
• At Virginia-based candy manufacturer Mars, for instance, meetings are
concerned almost totally with work issues.
• There is little tolerance for socializing or small talk.
 Fragmented culture
(low on sociability, low on solidarity).

• Organizations with this type of culture are made up of individualists.

• Commitment is first and foremost to individual members and their job tasks.
• There is little or no identification with the organization. In a fragmented culture,
employees are judged solely on their productivity and the quality of their work.
• The major downside to this culture is that it can lead to excessive critiquing of
others and an absence of collegiality and cooperation. Some large accounting and
law firms have this type of culture.
• Most top-tier universities and some large accounting and law firms take on the
properties of fragmented cultures. Professors at major universities, for instance,
are judged on their research and scholarship. Senior professors with big
reputations do not need to be friendly to their peers or attend social functions to
retain their status.
• Similarly, law partners who bring in new clients and win cases need to expend
little energy getting to know co-workers or being visible in the office.
 Communal culture
(high on sociability, high on solidarity).

• Organizations with this type of culture value both friendship and performance.
• People have a feeling of belonging, but there is still a ruthless focus on goal achievement.
• Leaders of these cultures tend to be inspirational and charismatic, with a clear vision of
the organizations’ future. The major downside to this culture is that it often consumes
employees’ lives.
• Its charismatic leaders frequently expect to create disciples rather than followers, resulting
in a work climate that is almost “cult-like.”
• Apple under Steve Jobs, particularly in its early years, is an example of a communal culture, as are
Hewlett-Packard Canada, Johnson & Johnson Canada, and consulting firm Bain & Company.
• HP historically has been large and very goal-focused. Yet it is also a company known for its strong
family feel.
• The “HP Way” is a set of values the company has developed that govern how people should behave
and interact with each other.
• The HP Way’s value of trust and community encourages loyalty to the company. The company returns
that loyalty to employees as long as they perform well. Many
• start-ups exhibit a communal culture.
• During the height of the dot-com era, 20-something employees thought nothing of working around
the clock, even sleeping and eating at their workplaces.
 Finding Your Culture
How do you know which culture is a good fit for you?
• ✔ You are cut out for a networked culture if you possess good social skills
and empathy; you like to forge close, work-related friendships; You thrive in a
relaxed and convivial atmosphere; and you are not obsessed with efficiency
and task performance.

• ✔ You are well matched to a mercenary culture if you are goal-oriented,

thrive on competition, like clearly structured work tasks, enjoy risk-taking, and
are able to deal openly with conflict.

• ✔ You are likely to fit in well in a fragmented culture if you are independent,
have a low need to be part of a group atmosphere, are analytical rather than
intuitive, and have a strong sense of self that is not easily undermined by
criticism.

• ✔ You might fit in with a communal culture if you have a strong need to
identify with something bigger than yourself, enjoy working in teams, and are
willing to put the organization above family and personal life.
 MATCHING PEOPLE WITH
ORGANIZATIONAL CULTURES
• Research by Goffee and Jones provides some interesting insights on different organizational cultures
and guidance for prospective employees.
• They have identified four distinct cultural types. Let’s take a look at their cultural framework and
how you can use it to select an employer where you will best fit.

• Goffee and Jones argue that two dimensions underlie organizational culture.
• The first is sociability. This is a measure of friendliness. High sociability means people do kind things
for one another without expecting something in return and they relate to each other in a friendly,
caring way.
• Sociability is consistent with a high people orientation, high team orientation, and focuses on
processes rather than outcomes.

• The second dimension is solidarity. It considers the strength of the group’s task orientation.
• High solidarity means people can overlook personal biases and rally behind common interests and
common goals. Solidarity is consistent with high attention to detail and high aggressiveness.
• Rated as either high or low. They create four distinct cultural types:
 Group 4
How does culture affect an
employee’s willingness to contribute
to the organization?
 THE LIABILITIES OF ORGANIZATIONAL CULTURE

• When David Dingwall took over as president and CEO of the Royal Canadian Mint, he faced
a large deficit and inefficient business processes.
• Dingwall recognized the need to streamline the Mint’s activities, but also knew that he
might face great resistance by employees.
• The culture of the organization before he arrived was generally accepted by the
employees.
• Dingwall knew that part of what he had to do to change the culture was to get the
employees onside with the changes.
• “I gave a commitment to all of our employees that nobody, but nobody, would lose their
job as a result of the lean enterprise. And some of them didn’t believe that, but when they
saw that we were walking the walk, that we weren’t laying people off as a result of lean
enterprise (practices), then it became more believable. We started to see the exhilaration
from employees in terms of improving our processes,” he says.
• At the end of 2004, just 20 months after Dingwall started, the Mint was set to have an
unprecedented good year.
• The Winnipeg plant doubled its staff during 2004, allowing it to operate day and night.
Revenue was $330 million, considerably higher than the Mint’s $250-million revenue in
2003. Net income for 2004 was $13 million, wiping out the deficit Dingwall faced when he
started.
 Pressure-Cooker Culture Leads to Enron’s Demise
• Would employees knowingly do wrong for their employer?
“At Enron, losers fell by the wayside but victors stayed in the game,” wrote two Washington Post
reporters.
• The “winner-take-all” culture demanded that employees do whatever they could to make Enron’s
stock price continually rise.
• Executives thus took risks with investments and accounting procedures, inflating revenues and hiding
debts. Those who could not (or would not) play this game were forced out.
• As the company’s annual report stated, “We insist on results.”
• “The driver was this unbelievable desire to keep portraying Enron as something very, very different
and keep the track record going and going,” said Forrest Hoglund, a former senior manager.
• Enron’s culture set up an in-crowd and an out-crowd, and employees knew whether they were “in” or
“out. Everyone wanted to be liked in the organization, according to Sally Ison, another employee.
“You do everything you can do to keep that.”
• Employees were even willing to blatantly acknowledge they were doing wrong among themselves,
according to Margaret Ceconi, a former Enron Energy Services (EES) manager, who was only briefly
employed by Enron. After she was laid off, she wrote a memo to Kenneth Lay, former chair of Enron,
and phoned federal regulators twice. In her memo to Lay she said, “EES has knowingly
misrepresented EES’ earnings,” and, she added, “This is common knowledge among all the EES
employees, and is actually joked about . . . [Enron] must investigate all these goings-on.”
• Enron’s culture led its employees to engage in various unethical accounting practices. Consistent with
what happened at Enron, recent research suggests that cultures that strongly emphasize competition
can lead to negative organizational consequences.
 culturally endorsed implicit
leadership theory (CLT),
• the culturally endorsed implicit leadership theory (CLT), which
identified the following leadership behaviors that were perceived as
effective across cultures.

• 1. Charismatic/value-based—the ability to inspire and motivate

others to high performance
• 2. Team-Oriented—effective team building and implementing a
common goal
• 3. Participative—involving others in decisions and implementations
• 4. Humane-Oriented—being supportive and showing consideration,
compassion, and generosity
• 5. Autonomous—independent and individualistic leadership
• 6. Self-protective—ensuring safety and security of individuals
including face-saving
 Can a culture change help with
turnover problems?
• Sheraton Suites Calgary Eau Claire had turnover
problems almost from the time it opened. Though the
hotel ranked third out of 210 Sheratons across Canada
in a 1999 customer satisfaction survey, its key
employees kept leaving.
• The consultants uncovered interesting concerns. The
hotel management had focused on team process,
encouraging and rewarding team behaviour. However,
the team culture was having a negative effect on many
employees. They did not feel that they were being
recognized and rewarded for what they were doing as
individuals.
 Can a culture change help with
turnover problems?
• Zupanski and his managers introduced changes to the hotel’s culture.
They made the recognition program more personal, rewarding such
things as attendance, performance, and extra work. Some employees
received an extra day off with pay for their hard work.
• The result, said the hotel’s human resource manager, was an incredible
change in atmosphere.
• Individual employees felt less stressed and more rewarded, which led to
overall performance improvements by everyone. Customer satisfaction
improved so much that the Eau Claire Sheraton received the Highest
Overall Guest Satisfaction award among 230 Sheratons in North
America in 2001, 2002, 2003, and 2004; it was also named #1 Sheraton
Worldwide Hotel of the Year in 2005.
• Zupanski noted that working together to change the hotel’s culture
brought “us together and brought trust and understanding into the team
atmosphere.”
 Group 4

Pressures on Global Teams and Global

Team Leaders
Pressures on Global Teams and Global
Team Leaders

• The negative impact language and culture

might have on
1. meetings,
2. decision making,
3. handling of conflict,
4. Motivations
5. dealing with time zone differences
6. language differences.
38 of 34
 1) Meetings
❑In some Asian cultures, meetings are seen as
ceremonies/ceremonial.
❑They are NOT where decisions are made or problems are
discussed.
❑All that happens BEFORE the meeting and the meeting
itself is the time for the announcement of the decision.
❑People who have more of an orientation towards the
culturally defined Need for Certainty find meetings
without agendas frustrating and disorganized.
❑They may feel that meetings are too loosely run or
accomplish too little because all that happens is idea
generation and more ideas are thrown out for discussion
but decisions are not made.
 2) Decision Making
• Whether decisions are made at the top, with or without robust
conversation and input, or are made by consensus (everyone must
agree before the decision is to be made) – all are underpinned by
various cultural preferences.
• For those with a Hierarchical Orientation – decisions need to be
made at the top. In some cultures, there is little or no discussion or
involvement of team members in the decision making.
• For those with a more Participative Orientation, this feels
demeaning, as if their opinion is worthless. If a team leader involves
team members in conversation when it is their expectation that an
effective team leader makes decisions without input from the team,
the team members may view the leader as ineffective and unable to
make decisions.
• In some cultures, issues are discussed behind the scenes (not in meetings) and
people are involved, invited to have their say (sometimes in social settings such as
drinks
40 of 34 after work, rather than at work, for example in Japan).
 3) Handling Conflict
• When things do not go well, team interactions break down very
fast on virtual and global teams.
• Leaders need to be particularly sensitive to cultural attitudes
about conflict (which differ greatly) in order to avoid having
misunderstandings blow out of proportion.
• Some cultures believe in maintaining harmony or not raising
critical issues for consideration because others on the team (or the
team leader) disagree(s).
• Some cultures prefer “heated interactions” and the intellectual
challenge of robust discussions. This approach may make team
members from group cultures, who value harmony, very
uncomfortable

41 of 34
4) Culture differences in Motivations
 5) Time Zone Differences:
• Most global teams are also virtual.
• The more widely dispersed the team members, the greater the potential for
stresses on the team. Too often people are working virtually (which in
relationship cultures is more difficult than face-to-face) when they are most tired
(during the evening or late night hours), in a second language.
• It is precisely this time when they are at their least effective as thinkers and
communicators.
• An unintended consequence to these late night meetings for those not at
headquarters, is the feeling that those required to be available for meetings at
odd hours are somehow less valued members of the team (which could lead to
morale issues).
• Effective global teams stagger the start time of team meetings so that all
members are equally “put out” over the course of the project. This often
minimizes the unintended consequences and recognizes those working in second
languages need to be at their freshest when they are working on difficult
challenges.
43 of 34
 6) Language differences
• People consistently report that they are far more creative and think
much faster in their primary language.
• To make sure they are easily understood, sensitive team members
avoid the use of acronyms and sports analogies which are hard to
understand (cultural context) or just do not translate well.
• Because one can speak a second language does not mean they are
equally facile in writing or reading it (or they may be better at
reading or writing than speaking).

44 of 34
 Cross-Cultural Communication
• Cultural Barriers
– Barriers caused by semantics
– Barriers caused by word connotations
– Barriers caused by tone differences
– Barriers caused by differences among perceptions

10–45
What factors hinder cross-cultural communication?
Cross-Cultural Communication
• Effective communication is difficult under the best of conditions. Cross-cultural
factors clearly create the potential for increased communication problems.
Cultural Barriers
• barriers caused by word connotations. Words imply different things in different
languages. The Japanese word hai translates as “yes,” but its connotation may be
“yes, I am listening,” rather than “yes, I agree.” Western executives may be
hampere in their negotiations if they do not understand this connotation.
• barriers caused by tone differences. In some cultures language is formal, and in
others it’s informal. In some cultures, the tone changes depending on the context:
• People speak differently at home, in social situations, and at work. Using a
personal, informal style in a situation where a more formal style is expected can
be embarrassing and offensive.
• differences in perceptions. People who speak different languages actually view
the world in different ways. The Inuit perceive snow differently because they have
many words for it.
• They also perceive “no” differently from English speakers because the Inuit have
no such word in their vocabulary.
What factors hinder cross-cultural communication?
Cultural Barriers
• When communicating with people from a different culture, what can you do to
reduce misperceptions, misinterpretations, and misevaluations? Following
these four rules can be helpful:
• • Assume differences until similarity is proven. Most of us assume that others
are more similar to us than they actually are.
• But people from different countries often are very different from us. So you are
far less likely to make an error if you assume others are different from you
rather than assuming similarity until difference is proven.
• • Emphasize description rather than interpretation or evaluation.
• Interpreting or evaluating what someone has said or done, in contrast with
describing, is based more on the observer’s culture and background than on the
observed situation.
8/12/2021