Building corporate culture at nghe an water supply limited company

DECLARATION Signed hereby, certify hereby: “Building Corporate culture at Nghe An water supply limited company” is my own reseach.The content and figure in the thesis reflect a true an

DECLARATION

Signed hereby, certify hereby: “Building Corporate culture at Nghe An water

supply limited company” is my own reseach.The content and figure in the

thesis reflect a true and fair situation in the internship organization I also declare that my research results have not been previously or concurrently submitted for any other works

Ha Noi, 5 th May, 2016

Student

Culture is a driving force in today's organizations Adopting corporate culturewill create a unique style and attitude for each company, creatingcentripetal force for the entire company, helps companies boost innovationand invention, and attract more customers The graduation thesisrepresents the results of research on building corporate culture Nghe Anwater supply limited company The objectives of the graduation thesiswere to understand the manifestations of corporate culture in Nghe An watersupply limited company and then give some recommendations to improvecorporate culture of this company

My sincere thanks also go to all teachers of faculty of foreign languages,Academy of Finance.

I would like to acknowledge Mr Nguyen Xuan Thang, the director of Nghe

An water supply limed company for creating favorable conditions for me toword at the company

Moreover, I would like to extend my special thanks to Ms Nguyen Van Anh,the manager of business department, Nghe An water supply limed companyfor providing me authentic and up-to-date information relating to currentsituation at the company for the fulfillment of this paper

I also want to convey my sincere thank to all staff of Nghe An water supplylimed company for their kindness Without their kind support, I could notfinish my research

I would to express my deepest appreciations to my classmate and friends, fortheir hearted-felt assistance and encouragement

Finally, I would like to acknowledge the encouragement and strong supportfrom my beloved family Without their love and dedication , this paper wouldnot be translated into reality

LIST OF ABBREVIATION

LIST OF FIGURES

Figure 1.1 - Maslow’s hierarchy of needs 8

Figure 1.2 - Levels of Corporate Culture 10

Figure 1.3-Corporate culture-iceberg’s principle 11

Figure 2.1: Nghe An water supply limited company 24

Figure 2.2 : NAWASCO’s Logo 25

TABLE OF CONTENT

DECLARATION i

ABSTRACT ii

ACKNOWLEDGMENT iii

LIST OF ABBREVIATION iv

LIST OF FIGURES v

INTRODUCTION 1

CHAPTER 1:LITERATURE REVIEW 4

1.1.Definition of corporate culture 4

1.1.1 Definition of corporate culture 4

1.2 Forming factors of corporate culture 5

1.2.1 Key business processes 5

1.2.2 Employees and other tangible assets 6

1.2.3 Formal arrangements 6

1.2.4 Dominant coalition 6

1.2.5 The social system 6

1.2.6 Technology 6

1.2.7 The external environment 7

1.3 Impacts of corporate culture on the development of a corporation 7

1.3.1 Creating the unique manner and attitude for each corporation 7

1.3.2 Creating the centripetal force for the whole company 7

1.3.3 Fostering innovation and invention 9

1.3.4 Creating the competitive advantage of the corporation 9

1.3.5 Attracting customers 9

1.4 Levels of corporate culture 10

1.4.1 Observable artifacts 12

1.4.2 Espoused beliefs and values 13

1.5 The role of leader – key factor creating corporate culture of an organization 17

CHAPTER 2:THE STUDY 19

2.1 An overview of Nghe An water supply limited company 19

2.2 Levels and manifestations of corporate culture in Nghe An water supply limited company 23

2.2.1 Artifact level and its manifestations 23

2.2.2 Espoused beliefs and values 30

2.2.3 The basic underlying assumption 33

CHAPTER 3:RECOMMENDATIONS 35

3.1 Recommendations to Nghe An water supply limited company 35

3.1.1 Improving the influence of core values inside and outside the company .35

3.1.2 Considering leadership style as the decisive element in building and developing corporate culture 36

3.1.3 Building the specific value system 38

3.1.4 PR and face-to-face communication with customers 39

CONCLUSION 41

REFERENCES 42

1 Rationale of the study

Nowadays, developing corporate culture is an urgent requirement of anycompany in integration process Corporate culture is the personality of acompany and it can’t be faked Through social networks, review sites andword-of-mouth, a company’s culture is revealed If employees are happy andfit in the culture, the company gets a strong name and more people want towork there

Culture of a corporation is not only the surface manifestation like dressing,office’s decoration, language but also the moral standard, the leadershipstyle, the behavior within company, etc These elements create the prestigeand brand name for all types of companies in general and for limitedcompanies in particular

Regarding corporate culture, people often think to “3P” philosophy : product-profit According to the importance of three elements, eachenterprise might have different ways of behavior in business Nghe An watersupply limited company (NAWASCO) is one of the largest limited companies

people-in Viet Nam.With this company, besides concentratpeople-ing on profit, the qualityand the diversity of services, human resource is the first concern.NAWASCO always tries to care about the material and spiritual life ofemployees; respect and encourage the initiation and creation of staffs.During the process of international business integration, corporate culturewill be the key factor which helps NAWASCO overcome the challengesand is the key for sustainable development of the company

In recent period of time, corporate culture is cared by both theleaders and staff members of Nghe An water supply limited company Theywant to build a value system of the truth-the good-the beauty for the

sustainable development target of the company Therefore, I chose thetopic “ Building corporate culture at Nghe An water supply limited company”

as graduation thesis topic in the hope that some findings andrecommendations from the study could be a reference to help furtherdeveloping a successful corporate culture for the company

2 Aims of the study

The study focuses on the concepts of corporate culture, the way it manifests inNghe An water supply limited company It is expected good recommendationswill be made for creating corporate culture process of this company Thus, thestudy aims to:

i Get deeper understanding of the corporate culture

ii Understand why, what and how the company forms and develops itscorporate culture

iii Find out some solutions and recommendations to develop and improve thecorporate culture in this company

3.Methods of the study

To collect data, qualitative methods including documentation, directobservation and interview are used in this research

Documentation is used as secondary source of information in forms ofbooks, articles and websites to collect information of theories relevant forthis thesis, background information about the organization and thestandards of its corporate culture

Direct observation is appropriate for collecting data on naturally occurringbehaviors in their usual contexts For this study, direct observation is the mainprimary method to help the writer collect the information of corporate culture

of the chosen objective

Interview is optimal for collecting data on individuals’ personal histories,perspectives, and experiences, particularly when sensitive topics arebeing explored In this study, the interview provides the addedinformation for the research of the real situation and helps the writer to makesuitable recommendations.

4 Scope of the study

This study focuses on the corporate culture of Nghe An water supply limitedcompany particularly, the way corporate culture manifests in this company.The study analyzes the corporate culture developed by the organization andgives some recommendations for the organization to improve its culture tomake its difference in the eyes of society, community and clients

It is necessary to answer three questions:

i What is corporate culture?

ii What are the manifestations of corporate culture in Nghe An water supplylimited company ?

iii What should Nghe An water supply limited company do to improve itscorporate culture in the future?

5.Organization of the study

Apart from the INTRODUCTION,CONCLUSION and REFERENCES, myresearch paper is divided into three chapters as below:

CHAPTER 1: LITERATURE REVIEW: An overview of corporate cultureCHAPTER 2: THE STUDY: The way corporate culture manifests in Nghe Anwater supply limited company

CHAPTER 3: RECOMMENDATIONS: Recommendations to improvingcorporate culture in Nghe An water supply limited company

CHAPTER 1 LITERATURE REVIEW

This chapter presents a review of literature related to the research work as documented by authorities’ on building corporate culture.

It will cover the definition of corporate culture, the forming factors and the main impacts of corporate culture, the corporate culture’s levels developed by Edgar H.Schein and a brief view on the role of leader to the development of culture in an organization.

1.1.Definition of corporate culture

1.1.1 Definition of corporate culture

In the past, the answer for the question “Why do people work for a certaincompany instead of one another?” might be the reasonable salary, the benefits

or the high position this organization offers However, in today’s changingbusiness environment, intangibilities are increasingly more crucial toemployees One tangible that seems to be most influential is corporate culture

So what is corporate culture? In the early seventies of the twentieth century,following the spectacular success of many Japanese corporations, Americancorporations started to pay attention to the underlying reason behind it Theterm of “corporate/organizational culture” was used by organization researchprofessors and managers to refer to one of the main reasons behind Japanesecorporations’ worldwide success

Many in-depth researches on composing parts as well as huge impact ofcorporate culture on the development of one enterprise were started to becarried out at the beginning of the nineteenth decade There are variousdefinitions for the concepts of “corporate culture”

Louis Handy mentioned corporate culture in the book “Understandingorganizations” as set of understandings or meanings shared by a group of

people that are largely tacit among members and are clearly relevant anddistinctive to the particular group which are also passed on to new members According to Donnelly et al (1992) organizational culture refers to the impact

on the environment resulting from group norms, values, philosophy, andinformal activities What this definition implies is that corporate culture issimilar to culture in society as it has norms, values, beliefs and patterns ofbehavior The definition also highlights that values and norms create culture Another definition comes from the International Labor Organization-I.L.O in

2005 that “Corporate culture is the values, beliefs, norms, and traditionswithin an organization that influence the behavior of its members”

Nevertheless, the most general definition of corporate culture is given by aprofessor of organization research, “Corporate culture is a pattern of sharedbasic assumptions that the group learned as it solved its problems of externaladaptation and internal integration, that has worked well enough to beconsidered valid and, therefore, to be taught to new members as the correctways you perceive, think, and feel in relation to those problems” (EdgarH.Schein, 2004)

This thesis will take this definition as the standard definition of the study

1.2 Forming factors of corporate culture

1.2.1 Key business processes

At the core of every corporation is the processes employees follow to gatherinformation, make decisions, communicate, produce a product or service andmanage work flow The corporation is defined by how leaders communicate

to employees, how they share decision making and how they structure thework flow The corporate processes influence and are influenced by the othersix factors that affect corporate culture

1.2.2 Employees and other tangible assets

A corporation’s resources such as employee population, plants and offices,equipment, tools, land, inventory and money, are used by the corporation tocarry out its activities These are the most visible and complex factors thatinfluence culture because their quality and quantity determine much of thecorporation’s culture and performance

1.2.3 Formal arrangements

Another factor that affects corporate culture is the formal arrangements thatorganize tasks and individuals These arrangements include the structure ofthe enterprise and its procedures, rules and specific mandated behaviors

1.2.4 Dominant coalition

A corporation’s culture is significantly affected by the goals, objectives,strategies, personal characteristics and interrelationships of its leaders, whoform the dominant coalition The leadership style of the corporation leadersdetermines how employees are treated and how they feel about themselvesand their work

1.2.5 The social system

The social system contributes norms and values to the corporate culture.Components like employees relationships, the grapevine and the informalorganization are also parts of the social system Because people are in theenterprise, their relationships define the enterprise’s character

1.2.6 Technology

The principle technological processes and equipment that employees use alsoaffect corporate culture For example, the utilization of technology plays arole The question to ask regarding technology is: Is a machine or processintended to productivity? The answer to this question sends a message aboutthe value of employees in the enterprise

1.2.7 The external environment

An enterprise’s external environment includes forces outside its boundariesthat directly and indirectly interact with it (Bittel, 1989) These forces might

be suppliers, markets, competitors, regulators, organized labor and otherelements outside an enterprise These forces affect the goals, resources andprocesses of an enterprise Obviously these elements shape the enterprise’sculture in many ways For instance, the government regulations can have aprofound effect on corporate culture as they normally protect the enterprisefrom competition

1.3 Impacts of corporate culture on the development of a corporation 1.3.1 Creating the unique manner and attitude for each corporation

Corporate culture is contributed by many components and elements such asbusiness philosophy, customs, rites, habits, trains, or even the legend of thefounder, etc All of these elements together contribute the style of anenterprise and help to distinguish this with others This style or manner andattitude plays the role like “air and water”, having a huge effect on the dailyoperation of enterprises It is not difficult to recognize the manner and attitude

of a successful corporation This style makes the strong impression on theoutsiders and is the pride of the corporation’s members Let’s take an example

of the Walt Disney House When entering this corporation, people can feelsome very common values through the uniform, some conversationallanguage used by Walt Disney’s employees (such as “a nice Mickey” means

“You are doing well”), common behaviors (always smile and polite withcustomers) and common feelings (very proud of doing for Walt Disney)

1.3.2 Creating the centripetal force for the whole company

A good corporate culture helps company attracting the talent andstrengthening employees’ loyalty A person works not only for money but also

for other needs The system of needs of human, according to Maslow, 1943, is

a triangle including five kinds of needs in ascending order: basic needs, safetyneeds, psychological needs, self – actualization and peak experiences Theseneeds are objective different tones of each individual Those needs createforces which impulse people to do but are not necessarily to be the ideals oftheir life From the model of A Maslow, it can be seen that it is wrong if acompany thinks that only high salary can help to attract and keep talent Anemployee will be loyal and want to have a strong attachment to a companyonly when he/she has interest in working, feels the nicely air and has thechance to assert himself In a quality corporate culture, all members have aclear awareness of their roles within overall, they work for commonobjectives

Figure 1.1 - Maslow’s hierarchy of needs

Common examples Organizational examples

Source: Duong Thi Lieu, 2008.

Food Stability

Friendship

Status Achievement

Base wage Allowance Title

Working challenges Colleges

1.3.3 Fostering innovation and invention

Within a strong corporate culture, the high self-reliance will be emerged.Employees are encouraged to be apart and raise their own ideas Thisencouragement helps employees proving their own creative abilities, as a base forR&D process of a company On the other hand, the success of workers will create

a diving force which helps to stick them with company for a longer time

1.3.4 Creating the competitive advantage of the corporation

The competitiveness of an enterprise can be adjusted in four aspects:flexibility (the ability of satisfying different needs of customer), the quality ofgoods/services (technological characteristic, reliability, industrial design,etc.), the Achievement Status Friendship Stability Food Working ChallengesTitle Colleges Allowance Base wage responsible speed in the market (theperiod of time from ordering to supplying, speed of developing a newproduct, etc.), cost (lower than competitors) Enterprises who want to gainthese advantages have to get three important resources: human resources,capital and technology The human resources involve directly adjusting,choosing and developing competitive advantages process of enterprise.Hence, this resource has the key meaning to the ability of gaining theseadvantages Meanwhile, corporate culture has the first direct effect on eachmember of an enterprise, which plays an important role in proving humanresource So, indirectly, corporate culture can affect the competitiveadvantages of an enterprise in the market

1.3.5 Attracting customers

Thanks to the manifestation of corporate culture in each level, corporateculture helps to create the unique organizational character This also helps toimprove the good image of company with customers, helps customersdistinguish each company and establishes the customers’ loyal withcompany’s goods and services

1.4 Levels of corporate culture

In general, corporate culture can be divided into two layers: surface layer andcore layer Surface layer includes such expressions as dress code, workenvironment, benefits, conversation, relationship, etc The core layer consists

of something cannot see or hear like values, invisible rules, attitude, benefit,assumptions, etc However, according to Edgar H.Schein, a professor oforganization research, in the book “Organizational culture and leadership”,corporate culture has three layers or three levels they are observable artifacts,espoused values and basic underlying assumptions

Figure 1.2 - Levels of Corporate Culture

Source: Edgar H.Schein, 2004

ARTIFACTS

Visible organizational structure and process

(hard to decipher)

ESPOUSED VALUESStrategies, goals, philosophies (Espoused justifications)

BASIC UNDELYING ASSUMPTIONS

Unconscious, taken-for-granted beliefs,

perceptions, thoughts, and feelings

(ultimate sources of values and action)

If we regard corporate culture concept as a metaphor, three levels of corporateculture can be described as an iceberg

Figure 1.3-Corporate culture-iceberg’s principle

Source: Edgard H Schein, 1999

Edgar H Schein reveals that what we commonly call “corporate culture”merely the tip of the iceberg, an iceberg that mangers ignore at the peril oftheir company’s future Underneath lays the much-harder-to-grasp “essence”

of the company, the “learned, shared, tacit assumptions on which people basetheir daily behavior” In fact, only the floating part of an iceberg whichaccounts for about 10 to 20 percent of total weight can be seen The otherhidden part which accounts for roughly 80 to 90 percent does decide thedirection of an iceberg Let’s imagine that the floating part is under theinfluence of the wind power while the hidden part is under the influence of

Artifacts

Espoused values

Basic underlying assumption

underground flow Thus, iceberg’s direction will be under the influence ofunderground flow regardless of wind power Therefore, we can be ArtifactsEspoused Values Basic underlying assumption clearly conscious of theimportance of basic underlying assumptions to an enterprise Details of threelevels will be described as follows.

1.4.1 Observable artifacts

At the surface of corporate culture is the level of artifacts This level includesall the phenomena that one sees, hears and feels when one encounters a newgroup with an unfamiliar culture Artifacts include the visible product of anorganization, such as the architecture of its physical of its environment,language, technology and products, its artistic creations, its styles (clothing,manners of address, emotional displays), myths and stories told about theorganization, its publish of list of core values, its observable rituals andceremonies and so on The most important point to be made about this level

of the culture is that it is both easy to observe and very difficult to decipher.The Egyptians and the Mayans both built highly visible pyramids, but themeaning of pyramids in each culture was very different tombs in one, temples

as well as tombs in the other In other words, observers can describe what theysee and feel, but cannot reconstruct from that alone what those things mean inthe given group, or whether they even reflect important underlyingassumptions On the other hand, one school of thought argues that one’s ownresponse to physical artifacts such as buildings and office layouts can lead tothe identification of major images and root metaphors that reflect the deepestlevel of the culture (Gagliardi, 1990) This kind of immediate insight would

be especially relevant if the organization is experiencing in the same largerculture as the researcher The problem is that symbols are ambiguous, and onecan only test one’s insight into what something may mean if one has also

experienced the culture at the deeper levels of values and assumptions Based

on this foundation, the artifact can be divided into the following categories:

i Architecture, decoration, technology, product;

ii Symbol, logo, brand name, slogan;

iii Language and dress;

iv Leadership style;

v Behavior within organization;

vi Behavior toward customers;

vii Ceremonies, stories of heroes, etc

1.4.2 Espoused beliefs and values

The next level of corporate culture is about the values Values define what anenterprise needs to do, what is right or wrong There are two kinds of values.The first one is available values which exist objectively and unprompted takesshape in corporation The other one is values which managers expect thecorporation to own and develop step by step Espoused values are thoseprinciples or ideas the group articulates or announces publicly as what standfor or what they are trying to achieve Values here include vision, mission,business philosophy and core values

1.4.2.1 Vision

The first step when building objectives and priorities is to briefly identifywhat our corporation will be in one point of future time, or in other words, tobuild vision Vision is the future status that an organization strives for Visionshows us common purpose and united activities “Vision” term refers to aspiritual picture, a prospective of the organization future This term also refers

to some time limited, or time horizon, in the short or middle run whichnormally is ten, twenty or fifty years for an influential vision

Expected vision should be a picture of where an enterprise will be in onecertain future day It is a picture of what it takes to reach perfection, forinstance, or for the best production method, or even of same qualityproduction method when company’s overall turnovers decrease to 10%.

It is necessary that corporation vision will be built first of all and informed toevery member Enterprise’s departments will take step specify objectives,methods and tools to achieve vision

It is essential that organization’s mission is designed for one certain stage ofits life

1.4.2.3 Business philosophy

Business philosophy is philosophic thoughts reflecting the business reality byexperiencing, thinking and generalizing of business subjects and then used toinstruct business activities of an organization Business philosophy of anorganization consists of three parts: mission and basic targets, operatingmethod and specific business activity

The roles of business philosophy are:

i The core of corporate culture, creates the firm development method forcorporate culture;

ii The oriental tool and base for strategic management

iii The medium for training, developing human resource and creating theiv.Specific working style for company

1.4.2.4 Core values

Organization core values are purified essence and are commonly recognized

It has a great impact on individual norm, behavior, and attitude amongcompany It is also the foundation of vision Core values are similar to rulers

of norms of behaviors Thanks to it, we are conscious of what consistent withcompany’s mission and then reach vision Core values are those will neverchange no matter how tough a company suffer, unless the enterprise goesbankruptcy or dissolution

Upon visiting Vietnam on January 10th, 2005, Brian Bacon who is thepresident of Oxford management Institute and former Chief Executive Officer(CEO) of Australian Coca-cola told an excellent example of core values forcorporations When taking a VND ten thousand paper-money in hand and ask,everybody will immediately tell us its face value of ten thousand Vietnamdongs When we rub it and ask, we will still receive the same answer Andeven when we drop and beat it and ask, the result is still ten thousandVietnamese dongs (VNDs) It simply represents unchangeable value of thepaper-money, or core values of an enterprise, in any circumstance

Values can be core values when: (1) there is united belief in wholeorganization; (2) it sets up norms and standard; (3) solid values to the verylast thing; (4) there are myths, rites or stories supporting existence

1.4.3 Basic underlying assumptions

The deepest level of culture consists of shared assumptions that provide afoundation for how people think about what happens in organizations Theseassumptions represent beliefs about reality and human natures that are takenfor granted and embedded in the way we understand and interpret daily life

Schein contends that underlying assumptions grow out if values, until theybecome taken for granted and drop out of awareness Assumptions are theresult of continually validated and reinforce values, they guide group’sbehavior, perceptions, thoughts, and feeling about a situation They can dealwith basic aspects of life through the correct way for the individual and group

to relate at each other; relative importance of work, family, and development; the proper role of men and women; and the nature of the family.Therefore, shared assumptions are the most difficulty to study and to changebecause people may be even unaware of or unable to articulate theassumptions forming their deepest level of culture

self-The basic underlying assumptions of an organization are thoughts, beliefs,awareness and emotion toward the internal and external environment These areassumptions of human, quality, performing ability, customers, competitor and therole of invention The manifestation of underlying assumptions is expressedthrough the conception of relationship between human and environment,conception of trust and reality, conception of human nature, of human activity andthe nature of human relationship and the conception of time

i Conception of relationship between human and environment deals with thequestions: What is our relationship with the environment? Do membersbelieve they have the capacity to master the environment, are they supposed

to live in harmony with it, or do they think they are controlled by it?

ii Conception of trust and reality are about the way to reveal the truth What

is real and how to determine the reality? Is truth revealed by externalauthority figures, or is the accuracy of information determined by a process ofpersonal investigation and testing?

iii Conception of human nature give answers to such questions: defines what

it means to be human and what human attributes are considered intrinsic orultimate Is human nature good, evil, or neutral?

iv Conception of human activity can be divided into three approaches: (1) a

“doing” orientation where people are basically active and evaluated according

to what they produce, (2) a being orientation where people are passive andunable to alter existing circumstances, and (3) a “becoming” orientationwhere people are continually developing and becoming an integrated whole

v Conception of human relationship: defines what is ultimately the right wayfor people to relate to each other, to distribute power and love? Is lifecooperative or competitive; individualistic, group-collaborative, orcommunal? What is the appropriate psychological contract betweenemployers and employees? Is authority ultimately based on traditional linealauthority, moral consensus, law, or charisma? What are the basic assumptionsabout how conflict should be resolved and how decisions should be made?

vi Conception of time: The shared assumptions that define the basic concept

of time in the group, how time is defined and measured, how many kinds of time there are, and the importance of time in the culture

1.5 The role of leader – key factor creating corporate culture of an organization

The leader is not the one who creates the values of corporate culture in anorganization but more important, he/she is the one who transmit, maintain andchange them into a “guiding system” to the whole company It is importantfor enterprises which want to succeed to have the sound system of principles.These principles are the foundation for enterprises to set their line and actions

It is more important that this system needs to create the loyalty, theattachment within the organization and is absolutely followed This requires