So sánh văn hóa doanh nghiệp và sự thay đổi văn hóa doanh nghiệp tại công ty ABB việt nam và công ty ABB singapore

13 TABLE 1-2: AMERICA VALUES AND POSSIBLE ALTERNATIVES...14 TABLE 1-3: COMPARISION BETWEEN OCAI METHOD AND OTHER METHODS 24 TABLE 1-4: EXAMPLE OF SCORING FOR CATEGORY DOMINANT CHARACTERI

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS

NGUYEN THI HONG LIEN

CULTURE COMPARISON AND CULTURE CHANGE – CASE STUDY OF ABB VIETNAM AND ABB SINGAPORE

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors: Dr Dao Thi Thanh Lam

Hà Nguyên, MBA

Hanoi – 2012

In ABB Group, I enjoy a dynamic multicultural working environment wherepeople follow international standards to serve customers globally Multiculturalfactors spill into every single process implemented, a software applied and to thecomplex network of suppliers, customers and partners in all over the world It isthe place where employees are encouraged and facilitated to experience workingglobally This gave me an impression that everyone should prepare and be readyfor a global working environment so that wherever he goes he can adapt andcontribute This also inspired me to come up with the idea of comparing culturebetween two same divisions in two different countries within ABB Group

I would like to express my sincere thanks to my colleges in ABB Singaporeand ABB Vietnam for their warm support when they can spend their precioustime doing the survey, sharing ideas, providing advice and giving me interestingquestions

It is also my chance to appreciate valuable advice from Mr.Jan-peder Dareus– Vice President, Business Unit Manager in Transformer Factory ABB Vietnam,

Mr Wong Yik Phui – Business Unit Manager in Power Product MediumVoltage in ABB Singapore and Ms Maria Cheong – Business Controller inPower Product Division ABB Singapore I have been educated and inspired bytheir management experience which helped me gain deeper understanding,diverse viewpoints and practical lessons, especially about culturaltransformation

I want to acknowledge and thank Mr Ha Nguyen and Dr Dao Thi ThanhLam for instructing and encouraging me to move on with the intriguing butchallenging subject – organizational culture

i

ABSTRACTCULTURE COMPARISON AND CULTURE CHANGE –

CASE STUDY OF ABB VIETNAM AND ABB SINGAPORE

Nguyen Thi Hong Lien MBA Candidate, 2008 – 2010 School of business Vietnam National University, Hanoi Supervisors: Dr Dao Thi Thanh Lam

Hà Nguyên, MBA

September 2012, 123 pages

While going global is becoming a buzz word nowadays, companies are alsobuilding awareness of being “global integration” while keeping “localadaptation” However, the matter is how to balance between the two conflictfactors In other word, how much can a company keep its cores, or what can be

“core” to keep is indeed a point to consider

This is also the case of ABB Group Having operations in around 100countries, with approximately 124,000 employees and reported global revenue

of US$37.99 billion for 2011, ABB positions itself among the largestconglomerates in the world Having stretched its arms to Vietnam since 1993and Singapore since 1971, the giant has become one of the most prestigiousnames in power and automation technology in both Vietnam and Singapore

To achieve such prestige, ABB Singapore and ABB Vietnam have beenpaying a huge effort to follow strictly a sophisticated standardization of the ABBGroup from organizational structure, business principles to operational process.Within such standardization, the question is “With two divisions which strictly

follow standardization, under same structure, just 1500 miles distance withinSoutheast Asia, they supposed to have many similarities rather than differences.Should we expect any surprise?”

The research result itself is really intriguing Cultural similarities? Yes,certainly However, when the two divisions pursuit Group‟s core principles andaim to the target, they choose different ways to go And even when they preferthe same culture type, they have different reasons and motivations for that.The thesis is focusing on pointing out the similarities and differences in theorganizational culture of the two companies‟ Power Product Division and theroles of culture in the business operation and performance of each division

iii

TÓM TẮT

SO SÁNH VĂN HÓA DOANH NGHIỆP

VÀ SỰ THAY ĐỔI VĂN HÓA DOANH NGHIỆP TẠI CÔNG TY ABB VIỆT NAM VÀ CÔNG TY ABB SINGAPORE

Nguyễn Thị Hồng Liên Học viên MBA, niên khóa 2008-2010 Khoa Quản trị kinh doanh - Đại học Quốc Gia Hà Nội

Hướng dẫn: Tiến sỹ Đào Thị Thanh Lam

Hà Nguyên, MBA

Tháng 9 - 2012,123 trang

Toàn cầu hóa đang trở thành một phần tất yếu ngày nay, các công ty đều xây dựngđược nhận thức về "hội nhập toàn cầu" trong khi vẫn giữ "thích ứng địa phương".Tuy nhiên, vấn đề là làm thế nào để cân bằng giữa các yếu tố xung đột đó? Nói cáchkhác, làm thế nào một công ty có thể giữ cho phần lõi, hoặc những gì có thể là "cốtlõi" lại là một điểm cần nghiên cứu, xem xét

Đây cũng là trường hợp của ABB Group Công ty hoạt động ở khoảng 100 quốcgia, với khoảng 124.000 nhân viên và báo cáo doanh thu toàn cầu của 37,99 tỷ USDcho năm 2011, ABB đã định vị là trong số các tập đoàn lớn nhất thế giới trong lĩnhvực năng lượng Sau khi mở rộng hoạt động của mình đến Việt Nam từ năm 1993

và Singapore từ năm 1971, người khổng lồ trong ngành công nghiệp năng lượng đãtrở thành một trong những tên tuổi có uy tín nhất trong ngành năng lượng và côngnghệ tự động hóa ở cả Việt Nam và Xin-ga-po

Để đạt được uy tín như vậy, ABB Xin-ga-po và ABB Việt Nam đã nỗ lực rất lớn đểthực hiện đúng tiêu chuẩn của tập đoàn ABB từ các nguyên tắc cơ cấu tổ chức kinhdoanh, quá trình hoạt động với nhiều yếu tố cấu thành phức tạp và tinh vi Trongtiêu chuẩn hóa như vậy, câu hỏi đặt ra là: "Với hai đơn vị tuân thủ nghiêm ngặt tiêuchuẩn, theo cấu trúc tương tự, khoảng cách 1500 dặm trong khu vực Đông Nam Á,

họ cho là có nhiều điểm tương đồng hơn là khác biệt liệu có những bất ngờ?"

Kết quả nghiên cứu đã chỉ ra rất nhiều điểm thực sự hấp dẫn trong sự tương đồngcủa văn hóa doanh nghiệp Tuy nhiên, khi nguyên tắc hoạt động cốt lõi hai công tytheo đuổi trong cùng Tập đoàn với mục tiêu có thể đạt được, họ chọn cách khácnhau để thực hiện Và ngay cả khi họ có cùng một loại văn hóa, họ có lý do và động

cơ khác nhau để thực hiện điều đó

Luận văn tập trung vào việc chỉ ra những điểm tương đồng và khác biệt trong vănhóa tổ chức của Bộ phận sản xuất thiết bị năng lượng (điện) của hai công ty về sảnphẩm và vai trò của văn hóa trong hoạt động kinh doanh cũng như hoạt động củatừng bộ phận

v

TABLE OF CONTENT

ACKNOWLEDEMENTS i

ABSTRACT ii

TÓM TẮT iv

TABLE OF CONTENT vi

LIST OF TABLES ix

LIST OF FIGURES x

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW 3

1.1 Definitions 3

1.1.1 Culture 3

1.1.2 Organizational Culture 5

1.2 Cultural layers & cultural diversity 6

1.2.1 The out layer (Explicit Products/Artifacts) 8

1.2.2 The middle layer (Norms and Beliefs/Espoused Beliefs and Values) 10

1.2.3 The core (Basic Assumptions/Underlying Assumptions) 11

1.3 Sub-culture 15

1.4 The importance of organizational culture 15

1.4.1 Coordination 16

1.4.2 Integration 17

1.4.3 Motivation 18

1.4.4 How well can organizational culture do its functions? 18

1.5 Culture analysis – OCAI method 19

1.5.1 General about culture analysis methods 19

1.5.2 Advantages of OCAI method 24

1.5.3 Dimensions in OCAI 25

1.5.4 Questionnaire applied in OCAI 27

1.5.5 Scoring the OCAI 28

1.5.6 What can be found from OCAI result 28

1.6 Methodology applied in the thesis 37

1.6.1 OCAI method 37

1.6.2 Interview method 37

1.6.3 Other analysis methods 38

1.6.4 Focused points 38

CHAPTER 2: CULTURE ANALYSIS IN ABB PP DIVISIONS 39

2.1 Introduction about ABB Singapore and ABB Vietnam 39

2.1.1 Introduction about ABB Group 39

2.1.2 Introduction about ABB Vietnam (VNABB) and ABB Singapore (SGABB)

42 2.2 Organizational culture comparison between SGABB’s and VNABB’s PP Division 45

2.2.1 Different dominant cultures but same major culture types 45

2.2.2 The current dominant culture gains cultural congruence in both countries 48

2.2.3 Differences in expected dominant culture types 53

2.2.4 Less cultural congruence for the expected dominant cultures & the inevitable emergence of Clan and Adhocracy 54

2.2.5 Diversity in expectation of employee groups 58

2.3 Factors influencing organizational cultures in the two Divisions 60

2.3.1 The vital role of standardization in ABB‟s operation 60

2.3.2 Market situation and market orientation in ABB Group 62

vii

2.3.3 Asian culture – a strong factor supporting for Clan Culture 66

2.3.4 Adhocracy Culture – an answer to the dilemmas 66

2.3.5 Business nature & the major sub-groups 66

CHAPTER 3: RECOMMENDATIONS 68

3.1 The importance of defining culture profile 68

3.2 Culture incongruence requires leadership involvement 68

3.2.1 Leaders are to listen and respect the needs of employees 69

3.2.2 Vision the future culture to pursuit 69

3.2.3 Define the culture transformation process 70

3.3 Visioning the transformation 70

3.3.1 ABB Vietnam – PP Division 71

3.3.2 ABB Singapore – PP Division 75

3.4 Operational change for the cultural change 79

3.4.1 In ABB Vietnam – PP Division 79

3.4.2 In ABB Singapore – PP Division 83

3.5 International cooperation and global resource utilization 88

CONCLUSION 91

REFERENCE 93

APPENDIX 1: VARIOUS CATEGORIES USED TO DESCRIBE CULTURE 97

APPENDIX 2: ENVIRONMENTAL VARIABLES AFFECTING MANAGEMENT FUCTIONS 99

APPENDIX 3: DENISON ORGANIZATIONAL CULTURE SURVEY 100

APPENDIX 4: QUESTIONAIRE SAMPLE 101 APPENDIX 5: CULTURE PROFILE COMPARISION VIETNAM VS SINGAPORE 105

LIST OF TABLES

TABLE 1-1: BONUS PERSPECTIVE IN INDIVIDUALISM AND COLLECTIVISM 13

TABLE 1-2: AMERICA VALUES AND POSSIBLE ALTERNATIVES 14

TABLE 1-3: COMPARISION BETWEEN OCAI METHOD AND OTHER METHODS 24 TABLE 1-4: EXAMPLE OF SCORING FOR CATEGORY DOMINANT CHARACTERISTIC 28

TABLE 1-5: SAMPLE SIZE IN THE TWO DIVISIONS 37

TABLE 2-1: ABB GROUP‟S KEY INFORMATION 39

TABLE 2-2: CHARACTERISTIC OF EACH EMPLOYEE GROUP 43

TABLE 2-3: DATA TABLE - VIETNAM PP DIVISION - PRESENT CULTURE AND PREFERED CULTURE THROUGH 6 CATEGRIES 55

TABLE 2-4: DATA TABLE - SINGAPORE PP DIVISION - PRESENT CULTURE AND PREFERED CULTURE THROUGH 6 CATEGRIES 57

TABLE2-5: COMPARISION BETWEEN SGABB PP DIVISION & VNABB 67

TABLE 3-1: VIETNAM PP DIVISION - EXPECTATION FOR MAJOR CHANGE 72

TABLE 3-2: SINGAPORE PP DIVISION - EXPECTATION FOR MAJOR CHANGE 76

TABLE 3-3: ACTION PLAN FOR VIETNAM PP DIVISION 81

TABLE 3-4: ACTION PLAN FOR SINGAPORE PP DIVISION 86

ix

LIST OF FIGURES

FIGURE 1-1: MODEL OF CULTURE – FONS TROMPENAARS 7

FIGURE 1-2: LEVEL OF CULTURE - SCHEIN 7

FIGURE 1-3: ICE-BERG MODEL 18

FIGURE 1-4: INDIVIDUALISM RANKING 21

FIGURE 1-5: THE COMPETING VALUES FRAMEWORK 26

FIGURE 1-6: THE COMPETING VALUES OF LEADERSHIP, EFFECTIVENESS, AND ORGANIZATIONAL THEORY 33

FIGURE 1-7: ERICSSON'S CULTURAL PROFILE 36

FIGURE 2-1: ABB STRUCTURE 41

FIGURE 2-2: PROPORTION OF EACH EMPLOYEE GROUP IN THE TWO PP DIVISIONS 44

FIGURE 2-3: NUMBER OF EMPLOYEES IN VNABB PP DIVISION AND SGABB PP DIVISION 45

FIGURE 2-4: VIETNAM PP DIVISION‟S CULTURE PROFILE 46

FIGURE 2-5: SINGAPORE PP DIVISION‟S CULTURE PROFILE 47

FIGURE 2-6: PRESENT ASSESSMENT THROUGH 6 CATEGORIES IN VIETNAM PP DIVISION 48

FIGURE 2-7: PRESENT ASSESSMENT THROUGH 6 CATEGORIES IN SINGAPORE PP DIVISION 49

FIGURE 2-8: SAMPLE DESCRIPTIVE ANALYSIS VIETNAM PP DIVISION 50

FIGURE 2-9: CURRENT ASSESSMENT OF EACH EMPOYEE GROUP 51

FIGURE 2-10: SAMPLE DESCRIPTIVE ANALYSIS SINGAPORE PP DIVISION 51

FIGURE 2-11: CURRENT ASSESSMENT OF EACH EMPOYEE GROUP 52

FIGURE 2-12: VIETNAM PP DIVISION - PRESENT CULTURE AND PREFERED

CULTURE THROUGH 6 CATEGRIES 55

FIGURE2-13: ABB SINGAPORE PP DIVISION - PRESENT CULTURE AND PREFERED CULTURE THROUGH 6 CATEGRIES 56

FIGURE 2-14: ABB VIETNAM PP DIVISION - PRESENT ASSESSMENT AND FUTURE EXPECTATION OF EMPLOYEE GROUPS 58

FIGURE 2-15: SINGAPORE PP DIVISION - PRESENT ASSESSMENT AND FUTURE EXPECTATION OF EMPLOYEE GROUPS 59

FIGURE 2-16: OVERVIEW OF 2011 – 2015 DIVISIONAL TARGETS 62

FIGURE 2-17: REVENUES AND OPERATIONAL EBITDA BY DIVISION 63

FIGURE 2-18: ABB‟S BUSINESSES BY DIVISION AND REGION 2011 63

FIGURE 2-19: ORDER GROWTH BY REGION 2010 VS 2011 64

FIGURE 2-20: GROWTH RATES ACROSS ALL DIVISIONS 65

FIGURE 3-1: VNABB PP DIVISION - MANAGEMENT APPROACH 71

FIGURE 3-2: SGABB PP DIVISION - MANAGEMENT APPROACH COMPARED WITH GENERAL APPROACH 75

xi

1 Purpose

The thesis focuses on the following points:

- Base on Organizational Culture Assessment Instrument to find out thecultural similarities and differences in the two Divisions in ABB Vietnam and ABBSingapore in terms of dominant cultures, culture congruence, expected dominant cultureand factors that drives the needs for culture change

- Define predominant factors that should be taken into consideration for

culture change so as to increase business performance

- Give recommendation for cultural change including action plan for each Division

2 The research scope

There are two defined research scope dimensions in this thesis to distribute a solid analysis and practical recommendation

- The factors to compare between the two Divisions are concentrated on sixcategories: (1) Dominant Characteristic, (2) Leadership Style, (3) Management ofEmployees, (4) Organizational Glue, (5) Strategy Emphases and (6) Criteria of Success

- The cultural comparison units are ABB Singapore‟s and ABB Vietnam‟s Power Product Division

3 Methodology

- The thesis use both quantitative and qualitative analysis, mainly based on OCAI method

- The information is collected from diverse sources: survey, interview,

observation, secondary data…

- Details are mentioned in 2.2 Applied method in the thesis

1

Structure of the thesis

Culture comparison transformation

The importance of Factors influencing Operational change for Organizational the organizational the culture change

Culture analysis

International cooperation and global resource utilization

2

CHAPTER 1: LITERATURE REVIEW 1.1. Definitions

In a common sense, culture is defined in the Cambridge Dictionary as “the way

of life, especially the general customs and beliefs, of a particular group of people at

a particular time”1 It can be interpreted from the above definition by the followingpoints:

 The way of life, general customs and belief: in that term, culture influences

people‟s behaviors so deeply that hardly can a member who lives in this culture can

be aware of that

 Particular group of people: culture is always related to a group of people, not individual

 Particular time: upon periods of times, culture haves different contents

A further step to enlarge the concept of culture beyond “custom” and “belief” is

given by Edward B.Tylor who stated culture is “complex whole which includes

knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society" 2 There are critical points in the

definition:

1 Cambridge Online Dictionary, http://dictionary.cambridge.org/dictionary/british/culture_1

2 Truman State University, Invitation to Cultural Evolutionism, Founding Figures, Edward Tylor, http://www2.truman.edu/~rgraber/cultev/malthus.html

3

 Complex whole: Culture is not a set of discrete things, it is a system.

 Capabilities and habits acquired: Culture includes of capabilities and habits which belong to a member of society

 Member of society: Similar to the above definition, culture always attaches to a group of people, not an individual

As the above definitions can show the wide connotation of culture, however,they just stop mainly at enumerating culture‟s elements without figuring out which

is the culure‟s core impact Come to Geert Hosfstede‟s time, the concept of culture

is generalized and given a solid understanding Geert Hosfstede3 is a well-knowpioneer for his research of cross-cultural groups and organizations He has played amajor role in developing a systematic framework for assessing and differentiating

national cultures and organizational cultures According to his definition, “Culture

is the collective programming of the human mind that distinguishes the members of one human group from those of another Culture in this sense is a system of collectively held values.” Following are remarkable notes in his definitions:

 Collective programming of the human mind: culture is mentioned as a mindsetwhich is shared among a group of people It is like “programming” or unwritten ruleswhereby the members of this group have a common way of receiving and processinginformation

 Distinguishes human group: Culture is different from each group to anothergroup Culture itself is a tool to distinguish human groups And once again, culture is aconcept attaching to a group of human, not an individual

 System of collectively held values: Culture is not just a set of common things; it

is a system of values which is collectively held for a period of time "Culture" is how wecall these unwritten rules about how to be a good member of the group Culture providesmoral standards about how to be an upstanding group member; it defines the group as a

"moral circle".4

3 http://changingminds.org/explanations/culture/what_is_culture.htm

4 http://www.geerthofstede.nl/

1.1.2. Organizational Culture

From the above definitions, it can be understood that the most intriguing aspect

of culture as a concept is that it points us to phenomena that are below the surface,that are powerful in their impact but invisible and to a considerable degreeunconscious Culture as a concept will be most useful if it helps us to betterunderstand the hidden and complex aspects of life in groups, organizations, andoccupations

Based on that concept, many researcher have been focusing on culture within anorganization, hence the concept of “organizational culture” has been established

For example, H.Schwartz and S.Davis stated culture as “a pattern of beliefs and

expectations shared by organization‟s members These beliefs and expectations produce norms that powerfully shape the behaviour of individuals and groups” 5

Another definition is from Deal and Kennedy who pointed culture as “espoused

values” - the articulated, publicly announced principles and values that the group

claims to be trying to achieve, such as “product quality” or “price leadership” Ingeneral, numerous of terms are used such as “shared meanings”, “root metaphors”,

“rules of the game”, “group norms”… (Appendix 1: VARIOUS CATEGORIES USED

and all of these manifest the strong impact of culture and

This thesis used the definition of Edgar H.Schein for Organizational Culture:

The culture of a group can now be defined as a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems 6

With the definition, there are critical points to understand about organizationalculture:

5 John L Thompson, Frank Martin, “Strategic management: awareness and change”, 5th edition, Thomson

 Pattern of shared basic assumptions: This is the critical aspect of culture, it meansthat certain things in groups are shared or held in common but they are so deep that allthe members of that group just take it for granted.

 Group: it is noticeable that “group” not “crowd” or “collection of people” is used

It follows that any group needs a certain level of stability in membership and a history ofshared learning to develop some level of culture, but a group that has had eitherconsiderable turnover of members and leaders or a history lacking in any kind ofchallenging events may well lack any shared assumptions

 Learned by a group as it solved its problems of external adaptation and internalintegration: All group and organizational theories distinguish two major sets of problemsthat all groups, no matter what their size, must deal with: (1) survival, growth, andadaptation in their environment; and (2) internal integration that permits dailyfunctioning and the ability to adapt and learn Both of these areas of group functioningwill reflect the larger cultural context in which the group exists and from which arederived broader and deeper basic assumptions, for examples, about the nature of reality,time, space, human nature, and human relationships

1.2. Cultural layers & cultural diversity

Culture is like gravity: you do not experience

it until you jump six feet into the air 7

Fons Trompenaars and Charles Hampden- Turner

As mentioned in the Definitions part, culture is “collective programming” or

“shared basic assumptions” so it is taken for granted by people absorbing this

culture People normally just realize their culture when they jump into anotherculture and realize how different between their familiar culture and the new one.Cultures differ from each other in many levels, from absolutely visible points todeeply profound factors Researchers categories cultures into many levels Forexamples, Fons Trompenaars divides culture into 3 levels which are the out layer -

7 Fons Trompenaars & Charles Hampden-Turner, “Riding the waves of cultures – Understanding cultural

diversity in business”, Nicholas Brealey Publishing, London, 2nd edition, 1998, pg.5

Explicit Products, the middle layer - Norms and Values, the core - BasisAssumptions while Schein categorizes culture into 3 level: Artifacts, EspousedBeliefs and Values, Underlying Assumptions.

Basic Assumptions

Norms and Values

Explicit Products

and processes(hard to decipher)

Strategies, goals, philosophies

Espoused Beliefs

Unconscious, taken-for-granted beliefs,

Underlying

perceptions, thoughts, and feelings

Assumptions

(ultimate source of values and action)

While the two researchers used different terms to categorize layers of culture, there are critical common points in their view

8Fons Trompenaars & Charles Hampden-Turner, “Riding the waves of cultures – Understanding

9 Edgar H Schein, “Organizational Culture and Leadership”, Jossey-Bass, USA, 3rd edition, 2004, pg 26

7

First, about the influences and how easy to realize one layer, the out layer of

culture is easy to realize but difficult to decipher as it is the outcome of deeperlayers The deeper of the layer, the stronger influence it has but it is more difficult to

be realized When it comes to the core layer, there are few profound assumptionswhich are taken for granted and decode all the factors in remaining layers Forexample, why staff in a hospital always stick with rules and procedures whendesigners in an IT company just talk about new ideas, new concepts? Dig down into

a deeper layer, we can see that with a hospital, its professional standard is hygiene,safe and secure where people lives can be taken with one slight mistake, therefore,rules and procedures are strictly follow to minimize the risk In contrary, ITcompany defines success as high speed in giving new products or service thatmotivates its employee to be creative and innovative for new concepts and ideas

Second, in term of cultural diversity and how can people accept culture differences, the level of diversity and acceptance varies through cultural layers The

diversity in every single layer, then the combination of all the differences in alllayers leads to cultural diversity and cultural conflicts also In the out layer, with itsapparentness, the layer shows numerous obvious and incoherent differencesbetween cultures and can make a new comer easily feel overwhelmed Luckily, to acertain level, people still can accept these differences when they are aware of that.For example, if a person changes his job from a financial institute to anentertainment company, he can change his style from tie and vest to T-shirt andjeans or he can enjoy a flexible working time instead of a fixed working time.However, to deeper level, even when the differences are figured out or verbalized,they are still difficult to be accepted as they already became “philosophy”, “rules”,

“correct or wrong” in mindset of people This difference in the level is indeed thefactor lead to cultural conflicts

1.2.1 The out layer (Explicit Products/Artifacts)

At the surface is the level of artifacts, which includes all the phenomena that onesees, hears, and feels when one encounters a new group with an unfamiliar culture.Artifacts include the visible products of the group, such as the architecture of its

8

physical environment; its language; its technology and products; its artisticcreations; its style, as embodied in clothing, manners of address, emotional displays,and myths and stories told about the organization; its published lists of values; itsobservable rituals and ceremonies; and so on.

The “climate” of the group is an artifact of the deeper cultural levels, as is thevisible behavior of its members Artifacts also include, for purposes of culturalanalysis, the organizational processes by which such behavior is made routine, andstructural elements such as charters, formal descriptions of how the organizationworks, and organization charts

The most important point about this level is that it is easy to observe and very difficult to decipher.

Example 1- Silent is good? Western society has a predominantly verbal culture.

They communicate with paper, film and conversation They become nervous anduneasy once they stop talking But they have very different styles of discussion Forthe Anglo-Saxons, when A stops, B starts It is not polite to interrupt The evenmore verbal Latins integrate slightly more than this; B will frequently interrupt Aand vice versa to show how interested each is in what the other is saying Incontrary, in Asia countries, there are usually moments of silence during discussionwhich really frightens the Westerner who thinks such moments are interpreted as afailure to communicate However, in Asia countries, it is a sign of respect for theother person if you take time to process the information without talking yourself

Example 2 – Representative, how many is enough? For a meeting, Japanese‟s,

Singaporeans, Nigerians and French usually send a group of representative whichare microcosms of the interests of their entire national subsidiaries In the face ofunexpected demands, they will wish to confer with those back home Yet to Anglo-Saxons, they usually send a single representative whose vote is on his or her privateconscience on behalf of constituents

1.2.2. The middle layer (Norms and Beliefs/Espoused Beliefs and Values)

The middle layer can be considered to include of “lessons” learned and sharedbetween members of a group which are already empirically tested and continue towork reliably in solving the group‟s problems

Another interesting point of this layer is that it includes “norms” and “values”.According to Fons Trompenaars:

Norms are the mutual sense a group has of what is “right” and

“wrong” Norms can develop on a formal level as written laws, and on

an informal level as social control Values, on the other hand, determine the definition of “good and bad”, and are therefore closely related to the ideals shared by a group.

A culture is relatively stable when the norms reflect the values of the group When this is not the case, there will most likely be a destabilizing tension While the norms, consciously or subconsciously, give us a feeling of “this is how I normally should behave”, values give us a feeling of “this is how I aspire or desire to behave” 10

Example 1: Some Japanese might say that they bow because they like to greet

people: that is a value Other might say they do not know why except that they do itbecause the others do it too Then we are talking about a norm

Example 2: In one culture people might agree with the value: “Hard work is

essential to a prosperous society.” Yet the behavioral norm may be: “Do not workharder than the other members of the group because then we would all be expected

to do more and would end up worse off.” Here the norm differs from the value.Not using the terms of “Norm” and “Value”, however, H.Schein also explainedthe difference between “what people say” and “what people do” by arguing that:

Beliefs and values at this conscious level will predict much of the behavior that can be observed at the artifacts level But if those beliefs

10 Fons Trompenaars & Charles Hampden-Turner, “Riding the waves of cultures – Understanding cultural diversity in business”, Nicholas Brealey Publishing, London, 2nd edition, 1998, pg 22

10

and values are not based on prior learning, they may also reflect only what Argyris and Schön (1978) have called “espoused theories,” which predict well enough what people WILL SAY in a variety of situations but which may be out of line with what they WILL ACTUALLY DO in situations in which those beliefs and values should, in fact, be operating 11

1.2.3 The core (Basic Assumptions/Underlying Assumptions)

To answer questions about basic differences in values between cultures it isnecessary to go back to the core of human existence

We see that a specific organizational culture or functional culture is nothingmore than the way in which groups have organized themselves over the years tosolve the problems and challenges presented to them Groups of people organizethemselves in such a way that they increase the effectiveness of their problem-solving processes Because different groups of people have developed in differentgeographic regions, they have also formed different sets of logical assumptions.The assumptions have such strong influence that people within a culture just

take them for granted, that we call “self-reference criteria” – an unconscious

reference to one‟s own culture values; understanding and relating to others only from one‟s own cultural frame of reference 12

It is the difference between the basic assumptions combined with self-referencecriteria to create culture conflicts

Example 1: Pay-on-performance, prospect or disaster? This is the story from

Missouri Computational Company (MCC) Since the late 1970s MCC has beenoperating in more than 20 countries As its foreign sales have grown, topmanagement has become increasingly concerned about international coordination.The company has therefore decided to coordinate the processes of measuring and

11 Edgar H Schein, “Organizational Culture and Leadership”, Jossey-Bass, USA, 3rd edition, 2004, pg 30

12 Helen Deresky, “International Management - Managing Across Borders and Cultures”, Prentice Hall, USA,

2006, p.484

rewarding achievement which is called “pay-on-performance” Accordingly, thebasic salary of all sales people were decreased by 10%, instead of that, the bonuswill be paid based on performance which is subject to how many percentage of thetarget they can achieve.

This method has worked really well in USA and the management expected that

it would bring them satisfactory results when applying to other countries So, how isabout the result?

In Western and Northern Europe: everything has been on smooth progress withpositive feedback for that method

In contrary, the situation has been more complicated in Italy, Spain and MiddleEast For the first 3 months, the result could be said to be above expectation,however, things has been going worse for the next 6 months The best sales man inprevious months has dropped his sales, even below his average performance

What has happened to the excellent sales people?

In Western and Northern Europe: the employees take this reward system as amotivation and a chance for them to contribute and develop They put more effort,get more success and admiration from the colleges, it is exactly “nothing succeedslike success”

In Italy, Spain and Middle East: The best sales man began to feel “guilty” when

he took the chance away from his colleges, so he tried extremely hard not to get thereward in the next periods

From the case, we can see that the management unintentionally has beenimposing three “self-reference criteria” without knowing the alternative criteria:

12

TABLE 0-1: BONUS PERSPECTIVE IN INDIVIDUALISM AND

COLLECTIVISM

Opinion/Actions

Issue Toward the management and the

With affiliates in Italy, Spain and affiliates in Western and Northern

Middle East, it is clear that… Europe, it is obvious that…

What can Bonus for excellent Positive regard and support frommotivate people? individuals colleges

group, which is

more important?

Is there any Everything must follow a It is a must to take considerationmethod to apply common rule Pay-on- for a specific situation It cannotworldwide? performance must be applied be applied arbitrarily with pay-

worldwide on-performance in Italy

Example 2:

Aspects of America

Alternative Aspects Examples of Management

The individual can Human action is Planning and schedulinginfluence the future determined by the will of

(where there is a will, God

Commitments should be A commitment may be Negotiating and

honored (people will do superseded by a bargaining

what they say they will conflicting request, or an

signify intention and havelittle or no relationship tothe capacity for

1.3 Sub-culture

Many organizations or communities comprise diverse subcultures whoseconstituents conform only in varying degrees to the community‟s character

For example, in one company there can be subcultures depending on many

factors including job natures A group of sales people can be seen as target orientedpeople, flexible and strongly customer focused while a group of engineers,especially in heavy industry will express themselves as structured, highly aware ofpolicies and procedure or standard and mainly internal focused

Therefore, it should be taken into consideration that generalizations in cultureprofiles will produce only an approximation, or stereotype of community ororganization character To have a deeper understanding about an organizationalculture, it is necessary to have an insight about its subcultures as well as theirattribution to the organization‟s culture

1.4. The importance of organizational culture

Organizational culture is an enigma which has held the attention of practitionersand researchers alike worldwide Extensive research and publications focus on alarge variety of links between organizational culture on one hand and organizationaloutcomes and functions on the other Topics include: personal productivity (Akinand Hopelain 1987, Welch 1990) financial performance (Denison 1984), strategicplanning and implementation (Arogyaswamy and Byles 1987, Schwartz and Davis1981), strategic success (Bluedorn and Lundgren 1993), recruitment and selection(Gross and Shichman 1987) as well as self-selection (Soeters and Schreuder 1988),innovation (Jassawalla and Sashittal 2002), marketing (Arnold et al 1987) or sales(Tinsley 1988)

Contributing to the numerous researches is an approach by Heinen in whichorganizational culture is viewed from a functionalist perspective The functionsinclude coordination, integration and motivation

1.4.1 Coordination

In a company, the need for coordination derives from internal separation andspecialization of tasks, and interdependency of the behaviors and decisions oforganizational members This need escalates with levels of task separation, task-related interdependency among organizational units Besides, coordination helpsreduce the risk that granted freedom of decision-making in the sense of autonomyand delegation may lead to ineffective results There are two types of coordinationpossibilities

On one hand, coordination can be implemented by structural instruments ofincluding plans or programs, and can function in either a centralized ordecentralized organization However, these structural means of coordination showinherent weaknesses They can leave room for interpretation and only expresscertain expectations for the target group‟s behavior Motivational and creativitydeficiencies might be a key consequence if structural coordination is imposedwithout creating shared values and an understanding for them in order to make themoperate properly

On the other hand, a major complementary instrument of coordination is found

in organizational culture Two concepts of non-structural coordination mechanism:markets and clans Thereby, markets function through negotiations betweendemand- and supply-side parties without the need for extensive structuralcoordination, and clans solve coordination problems by creating an orientation fororganizational members through shared values and norms

By this effect, the importance of organizational culture is underlined by theaforementioned drawbacks of utilizing only a formal, structural coordinationmechanism, especially in regard to more dynamic and complex tasks andenvironments where formal coordination does not satisfy all coordination needs Inshort, a gain in speed and increased effectiveness as well as efficiency can be majorconsequences, and the aspects of the coordinating function an organizational cultureare fulfilled

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Research into the transformation towards new forms of organizing indicates thatcultural programs have the potential to replace the previously existing verticalcommand and control systems Martinez and Jarillo (1989, p 489) claim thatinformal and social modes of control emerge in multinational companies as anecessary result to counter international dispersion of organizational units.Organizational culture represents a crucial means of the coordination and control ofmultinational companies (Jaeger 1983), in addition to accounting-basedmechanisms (Shapiro 1978), human resource management (Edstrom and Galbraith1977), and specific decision-making patterns (Egelhoff 1988)14.

1.4.2 Integration

In addition to the important coordination function, organizational culturecontributes to the solution of another tension field of organizing between centrifugaland centripetal forces, or the right degree of integration

Centrifugal forces are created in organizations for various reasons Increasinginternational activities, increasing autonomy and decentralization of organizationalsub-parts result in its members and units becoming more focused on their particularfunctional and divisional goals Through corporate growth either via internal growth

or M&A, the need for differentiated sub-units to keep productivity and efficiencyhigh is created Besides, dominating interaction with their unit's colleagues and anappraisal system focusing on job performance within the units foster thedevelopment of corporate sub-cultures

In contrast to these centrifugal forces, organizational culture can act as a “socialglue” (Albert and Silvermann 1984, p 13, Smith and Simmons 1983, p 377) to keepthe corporation together Organizational culture reminds employees of corporatehigher goals, of the big picture In view of the tendency to delegate, decentralize,internationalize, empower, and to rely on trust, this glue that organizational culturerepresents will assume an even more crucial role in the future

14 Wolfgang Amann, Dissertation on “The impact of internationalization on organizational culture a

comparative study of international US and German companies”, University of St.Gallen, German, 2003, pg.40

1.4.3 Motivation

A strong system of clear values can endow employees with an appreciation ofthe value of their work that may often otherwise be lacking due to the extensiveseparation and specialization of tasks in addition to automation

For example, some organizational cultures allow and foster self-actualizationthrough entrepreneurship in profit center structures or implementation of anemployee‟s own ideas by providing either additional time or financial resources fortheir own research efforts beyond the set research plan

1.4.4 How well can organizational culture do its functions?

Obviously, how well the functions can be performed by organizational culturedepends on the correlation between the organization‟s target and goals, strategies

with its culture, meaning the culture can be either a vital contributor or a deadly constraint for the organization on the way to aim at its goals It can be illustrated

by the figure below which is developed by Brain Bacon:

Strategy Wind

Culture

Flow

According to the Ice-berg model, we can see:16

The floating part of the ice-berg is easily recognizable but it is just a minorproportion with 10-20% of the total weight, in contrary, the sunk part is difficult to

15 Brain Bacon, “Aligning People with Stratergy”, www.Oxfordleadership.com

16 Dr Novak Summersemester, “Multicultural Management”, International Technology Transfer

Management, 2004, p.2.

18

realize but it occupies 80-90% of the total weight which stands for the inertia or thedifficulties in movement changing.

Thus, it is the sunk part not the floating part which needs influencing if we want theice-berg to move Moreover, it is understandable when the wind and the flow influencethe ice-berg with opposite direction, the iceberg will move following the flow

Culture is beneath awareness in the sense that no one bothers to verbalize it, yet it forms the roots of action This made one anthropologist liken it to an iceberg, with its largest implicit part beneath the water 17

Similarly, in an organization, it is easy to see plans, strategies, structure, goals…but they are just the floating part which is quickly changeable However, the sunkpart including norms, values, underlying assumptions…which has a total impact onthe organization is visible as well as difficult to change Therefore, a completechange requires both culture and strategy, goals to have correlation with each other(Appendix 3: ENVIRONMENTAL VARIABLES AFFECTING MANAGEMENTFUCTIONS)

1.5 Culture analysis – OCAI method

1.5.1 General about culture analysis methods

To understand the basic underlying drives that influence the operation anddevelopment of an organization, it is critical to capture its culture However, if onlyanalyzing culture by collecting its incoherent signs in many layers, it is just adiscrete finding, not a systemic comprehension Consequently, it is difficult tounderstand it as a whole system and inevitably impossible to predict its responds or

to change it

17 Fons Trompenaars & Charles Hampden-Turner, “Riding the waves of cultures – Understanding cultural diversity in business”, Nicholas Brealey Publishing, London, 2nd edition, 1998, pg 24

Obviously, it is not easy to capture an organizational culture in some specificwords because organizational culture is extremely broad and inclusive in scope.However, categorizing culture into types can help a company‟s cultural tendencyinterpreted, analyzed and changed.

There are various methods to categorize culture because it comprises a complex,interrelated, comprehensive and ambiguous set of factors For examples, Deal &Kennedy proposed a dimension based on Speed of Feedback (high speed to lowspeed) and a Degree of Risk dimension (high risk to low risk), Ernst argued forPeople Orientation (participative versus non-participative) and Response to theEnvironment (reactive versus proactive) while Hofstede focused on Power Distance,Uncertainty Avoidance, Individualism, and Masculinity, then broaden to Long-termorientation

 Power distance: a measure of the inequality between „bosses‟ and inferiors, the

extent to which this is accepted

 Uncertainty avoidance: the degree to which one is comfortable with or feels

threatened by ambiguous, uncertain situations, the extent one can or cannot tolerateuncertainty and tries to avoid it by establishing more structure

 Individualism – Collectivism: the degree to which a culture relies on and has

llegiance to the self or the group In other words, it is the degree to which one thinks

in terms of „I‟ versus „we‟; either ties between individuals are loose or people are part of a cohesive group throughout their lives

 Masculinity – Femininity (also known as achievement versus nurturance

orientation): the degree to which a culture values such behaviour as assertiveness,achievement, cquisition of wealth or caring for others, social support and quality of life

 Confucian dynamism: this fifth dimension was later added following

Hofstede‟s work with Michael Bond (Hofstede & Bond 1988) which was meant toexplain the rapid economic development of many Asian countries This dimensionrefers to the selective promotion of particular set of ethics found in Confucianteachings Particular teachings that lead to economic development include thrift,

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perseverance, a sense of shame, and following a hierarchy Other Confucianteachings are less emphasised such as tradition and protecting face.

The impact of long-term or short-term orientation is also studied as part of thisdimension

Example 1: Individualism vesus Collectivism (categorized by Hofstede)

One of the main point of Asian culture is Collectivism, in contrary with Westernculture individualism Hofstede stated collectivism is the degree to whichindividuals are integrated into groups On the individualist side we find societies inwhich the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family On the collectivist side, we find societies inwhich people from birth onwards are integrated into strong, cohesive in-groups,often extended families (with uncles, aunts and grandparents) which continueprotecting them in exchange for unquestioning loyalty

Through Hofstede‟s research about main dimensions between countries, we cansee the interesting figure below for Collectivism ranking

18 http://www.geerthofstede.nl/

Through the Scale of Hofstede, Sweden and Switzerland can be considered asindividualistic with a relatively high score (71 points and 68 points relatively) Insuch countries, people emphasize on personal achievements and individual rights.They expect from each other to fulfill their own needs Group work is important, buteverybody has the right of his own opinion and is expected to reflect those In anindividual country people tend to have more loose relationships than countrieswhere there is collectivism.

In contrary, Singapore and Vietnam as other Asian countries have low rankingfor Individualism The low Individualism ranking is manifested in a close andcommitted member 'group', be that a family, extended family, or extendedrelationships Loyalty in a collectivist culture is paramount The society fostersstrong relationships where everyone takes responsibility for fellow members of theirgroup

National culture differences are reflected not only in solutions to organisationproblems in different countries, but also in the validity of management theories inthese countries

Different national cultures have different preferred ways of structuringorganisations and different patterns of employee motivation For example, they limitthe options for performance appraisal, management by objectives, strategicmanagement and humanisation of work In his research into organisation cultures,Hofstede identified six independent dimensions of practices:

• process-oriented versus results-oriented;

• job-oriented versus employee-oriented;

• professional versus parochial;

• open systems versus closed systems;

• tightly versus loosely controlled; and

• pragmatic versus normative

The position of an organisation on these dimensions is determined in part by the business or industry the organisation is in Scores on the dimensions are also related

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to a number of other „hard‟ characteristics of the organisations These lead toconclusions about how organisational cultures can be and cannot be managed In thecase of international business, it means handling both national and organisationalculture differences at the same time Hofstede argued that „organisational culturesare somewhat manageable while national cultures are given facts for management;common organisational cultures across borders are what keep multinationalstogether While defining culture as „the collective programming of the mind whichdistinguishes the members of one human group from another‟, Hofstede (1991,1997) emphasises that culture is not a property of the individuals, but of groups.The Denison organisational culture survey (Appendix 4: DENISONORGANIZATIONAL CULTURE SURVEY) (Denison 1990) is another instrumentfor which evidence of sensitivity to organisational change has been presented Thistool assesses organisational culture along the four basic cultural traits, which arepresented by certain organisational dimensions The tool consists of 60 items, whichare used to assess and measure the dimensions.

Denison‟s Organisational culture survey offers a quantitative multi-dimensionalassessment of the main organisational cultural traits The assessment has also beencorrelated with organisational performance measures Denison (1990) argues thatthis approach allows for assessment of the ways in which organisations (or sub-groups within organisations) deal with seemingly contradictory or paradoxical goalsand demands Denison regards the understanding of such conflicts as essential todeveloping sustainable adaptive organisational behaviour, and a number of studieshave reported that the pattern of cultural traits of high-performance organisationscan be clearly distinguished from those with lower performance (Denison 1984;Denison & Mishra 1995; Fisher & Alford 2000) Under such a model,organisational culture might be viewed as the system that permits organisations tomake coordinated adaptive responses to the numerous competing and evenparadoxical demands

1.5.2 Advantages of OCAI method

This thesis bases on categorize method of Kim S.Cameron & Robert E.Quinn19

called Organizational Culture Assessment Instrument (OCAI) with main

benefits and advantages like following:

TABLE 0-3: COMPARISION BETWEEN OCAI METHOD AND OTHER

METHODS

 Focus on organizational  Focus on national  Focus on

 The first intervention to  Not mentioned  To explain how

contradictory orvalues framework that

paradoxical goals andargues each company can

demandspick up a proportion

among 4 categories as

their strength to deal with

internal integration and

 People become aware of

the current and of the

preferred culture

“Where are we now and

where do we want to or

have to go?” This can

generate momentum for

19 Kim S.Cameron & Robert E.Quinn, “Diagnosing and Changing Organizational Culture: based on the

competing values framework”, Jossey Bass, Revised Edition, 2006

24

 Based on 6 specific  Categories are not 

categories, it is easier to pointed out

predict which measures specifically to define

of change will turn out to where the effects come

be effective

Management will get

more grips on change

 Resistance to change can

be anticipated, it will not

happen completely

unexpected

 It offers starting points to  Culture changes are  Not mentionedencourage employees also mentioned but in a

and thus use their energy form of ideas, not

step-and creativity that leads by-step

to more support for

change

 It is the basis for a

step-by-step, systematic

change plan

1.5.3 Dimensions in OCAI

According to S.Cameron and Robert E.Quinn‟s method to find out the

dimensions, key questions are considered:

1 What are the main criteria for determining if an organization is effective ornot?

2 What key factors define organizational effectiveness?

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