Culture is the pattern of basic assumptions for any group or organisation that has had a substantial history, discovered or developed in learning to cope with its problems of external adaptation and internal integration (Frank, 1987). It can also be said that culture is an acquired knowledge that people use to interpret, experience and generate social behaviour. This knowledge forms values, creates attitudes and influences behaviour. It is based on the human capacity to symbolise or use one thing to represent other (Luthans and Doh, 2009).
The aim of this essay is to highlight 'How Culture affects the Organisation and it's Employees'. The organisation described here is a real life organisation and the study is based on experience, discussions, informal interviews and observations. The essay is mainly divided in six parts, starting with the brief idea about culture in general followed by corporate culture. It proceeds further with the review and critical analysis of some cultural theories by taking JP Morgan Chase Bank, India as a case study. It concludes with a discussion on the effects of culture on organisation and employees.
What is Corporate Culture?
The concept of organisational or corporate "culture" has in recent years forced its way to the forefront of the managerial and academic literature (Kirkbride, 1987). Organizational sciences views organizational culture as a principle aspect of an organization's functioning and a critical driver of effectiveness (Schein, 1983, 1984, 1985, 1992) as cited in (Yilmaz and Ergun, 2008). Over the last 20 years, organisational culture has been a topic of significant interest in the organisational studies literature. Researchers have used various definitions of organisational culture including shared belief system within an organisation (Spender, 1983); widely shared core values (Peters and Waterman, 1982; O'Reilly, 1989); collective understandings (Van Maanen and Barley, 1984); and the pattern of basic assumptions within an organisation (Schein, 1985) as cited in Helms and Stern, (2001).
Buchanan and Huczynski (1997) define corporate culture as:
The collection of relatively uniform and enduring beliefs, values, customs, traditions and practices which are shared by an organisation's members and which are transmitted from one generation of employees to the next.
Interestingly, most research on organisational culture has worked from the foundation that culture is nearly universally shared within organisations (Helms and Stern, 2001). Core values and assumptions are often at the root of organisational systems and structures (Denison and Spreitzer, 1991) and hence organisational culture has a direct influence on the bottom line of the organisation. The happier the people are in the organisation, the more effectively they work together, the more gets done & the more is the product output.
Every organisation has its own particular pattern of assumptions about the world. Cultural assumptions affect how the organisation sets strategy, develops goals, chooses the means for reaching those goals, decides to measure its progress and controls its output, and how it decides to remedy situations that are out of line with goals.
Organisational culture creates an environment that helps in stimulating creativity and motivation, thus leading to higher productivity and quality (Matthew, 2007). It is considered as a significant tool of management control (Buchanan and Huczynski, 1997). There is nothing like an 'Instant Culture' as culture is cumulative and is passed down from one generation to the next (Luthans and Doh, 2009). Time to time nurturing of an organisational is essential.
The above diagram helps us believe that certain aspects of culture are more apparent than the others, just as the outside layers of an onion or the tip of an iceberg are visible. This manifest culture represents first contact with a new culture, for example, people's speech, dress, interaction with each other, and possessions. A deeper meaning of culture comes from peeling away the outer layers of the onion or looking below the tip of the iceberg
Collaboration of the GLOBE project with Hostede's Cultural Dimensions
GLOBE Basic Assumptions
Hofstede the Dutch researcher describes culture as a collective programming of the mind which distinguishes the members of one group or category of people from another. Hofstede developed four characteristics of national work cultures that he distinguished between a large number of national cultures within one organisation (Denison and Spreitzer, 1991). After considering Hofstede's cultural dimensions, scholars from 170 countries came together for a multicountry study and evaluation of cultural attributes and leadership behaviours among more than 17,000 managers from 951 organisations in 62 countries (Luthans and Doh, 2009). They named this as the GLOBE (Global Leadership and Organisational Behaviour Effectiveness) research project. It was reflects an additional approach to measuring cultural difference. The GLOBE mainly touched the nine 'Cultural Dimensions'. The 1st six are based mainly on Hofstede's cultural dimensions..
The GLOBE project was initially designed to analyze the relationship between societal values and practices, and leadership effectiveness. GLOBE offers an alternative perspective to the existing frameworks on cultural dimensions. (http://www.springerlink.com/content/gq5m7u96v87v2235/fulltext.pdf)
Masculine vs. Feminine
In many societies lower level employees tend to follow orders as a matter of procedure (Luthans and Doh, 2009). Hierarchical Inequality is observed everywhere in the society. However some are more unequal than others. Power Distance is the extent to which less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally (Hostede, 1991). A high context culture is generally well reviewed and inaccessible. In organisations, employees are not comfortable sharing their views and ideas with their superiors and vice versa. At home and in school, children have to be extremely obedient and are permitted to speak only when invited. They have to strictly follow the orders given. Teachers are 'Guru' and so are highly honoured. They are never publicly contradicted or criticized and are treated with defence even outside school (Hostede, 1991). Also there is a large gap of salary range between superiors and subordinates (Hofstede, 1991). In low power distance however, employees are not afraid of their superiors and the boss also treats his employees equally. A consultative leadership style is practiced as the boss consults and involves his subordinates in decision making. There is a limited dependence of subordinates on their bosses and also the emotional distance between them is relatively small. The subordinates quite readily approach and contradict their bosses. Even in schools and at home, children are treated equally by their teachers and their parents. They are supposed to take up initiatives and make their own ways. A healthy and friendly discussion atmosphere is appreciated.
Individualism & Collectivism
A minority of people in our world live in societies in which interests of the individual prevail over the interests of the group. This is 'individualism' (Hostede, 1991). Individualism is more of 'I' and hence people are supposed to look after themselves and their immediate families only. Self actualisation, individual initiative and achievement and loose ties between individuals are observed. On the other hand, a vast majority of people in our world live in societies in which the interest of the group prevails over the interest of the society/individual (Hostede, 1991). This tendency of people to belong to groups or collectives and to look after each other in exchange of loyalty is 'collectivism' (Luthans and Doh, 2009). Family relations, loyalty and harmony are highly valued. Hofstede studied that wealthy countries like US, Canada, Australia, etc. have high individualism, whereas poor countries of Indonesia, Pakistan and many South American countries have a greater level of collectivism (Luthans and Doh, 2009).
Institutional Collectivism is the degree to which individuals are integrated into groups within the society. Leaders encourage (should encourage) group loyalty even if individual goals suffer (House and Javidan, 2003). The dimension measures societal emphasis on collectivism, with low scores reflecting individualistic emphasis and high scores reflecting collectivistic emphasis by means of laws, social programs or institutional practices (House et al.).
The degree to which individuals have strong ties to their small immediate groups is 'In-Group Collectivism'. (House and Javidan, 2003). This measures group (family and/or organization) collectivism and cohesiveness - pride in and loyalty to family and/or organization (House et al.).
Masculinity versus Femininity
Masculinity as defined by Hofstede is the situation wherein individuals are encouraged to be independent decision makers, and achievement is defined in terms of recognition and wealth. There is high job stress in the workplace, and industrial conflict is common. Countries, such as Japan, with a high masculinity index place great importance on earnings, recognition, advancement and challenge. (Hodgetts). Cultures with high masculinity index favour large scale enterprises and the school system is geared toward encouraging high performance. Young men expect to have careers, and those who do not, often view themselves as failures. Fewer women hold higher-level jobs, and these individuals often find it necessary to be assertive (Hodgetts). Contrary to some stereotypes and connotations, femininity is the term used by Hofstede to describe "a situation in which the dominant values in society are caring for others and the quality of life." (Hodgetts). Whereas femininity pertains to societies in which social gender roles overlap (i.e. both men and women are supposed to be modest, tender, and concerned with the quality of life) (Hofstede). Countries, such as Norway, with low masculinity index tend to place great importance on cooperation, and friendly atmosphere, and employment security. The school system is designed to teach social adaptation. Some young men and women want careers; others do not. Many women hold higher-level jobs, and they do not find it necessary to be assertive (Hodgetts).
The GLOBE study has completely ignored the feminine side of the culture and divided Hofstede's dimension of Masculinity into two separate dimensions of 'Assertiveness' and 'Gender Egalitarianism'.
Assertiveness is defined as the degree to which individuals in organisations or societies are assertive, confrontational, and aggressive in social relationships (Luthans and Doh, 2009). Members of assertive societies tend to dominate and actively control their environment. They demand their relationships with others, respect strength and stress competition. (House and Javidan, 2003). Societies scoring high on assertiveness value high dominant, tough and straightforward behaviour. Societies scoring lower on assertiveness tend to value modesty and tenderness; they are less straightforward and have a greater compassion for the weak.
Gender Egalitarianism is the extent to which an organisation or a society minimises gender differences and inequality (Luthans and Doh, 2009). Individuals, are/should be encouraged and rewarded equally irrespective of their gender.
Is defined as the extent to which members of an organisation or society strive to avoid uncertainty by reliance on social norms, rituals and bureaucratic practices to alleviate the unpredictability of future events. The extent to which a society, organization, or group relies on social norms, rules and procedures to alleviate unpredictability of future events. The extent to which a society, organization, or group relies on social norms, rules & procedures to alleviate unpredictability of future events (House et al.).
Uncertainty is "the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these. (Hodgetts)
Performance Orientation refers to the extent to which an organisation or society encourages and rewards group members for innovations, performance improvement and excellence (Luthans and Doh, 2009). For instance, students are encouraged to strive for continuously improved performance (House and Javidan, 2003).
Human Orientation is defined as the degree to which individuals in organisations or societies encourage and reward individuals for being fair, altruistic, friendly, generous, caring and kind to others (Luthans and Doh, 2009). People are generally very tolerant of mistakes (House and Javidan, 2003).
The degree to which individuals in organisations or society encourage and reward group members for performance improvement and excellence is 'future orientation' (Luthans and Doh, 2009). It is the extent to which a collective appreciates future-oriented behaviours such as delaying gratification, planning & investing in the future (Terlutter et al.,2006).
The Globe research has been considered among the most sophisticated in the field to date, and a collaboration of Hofstede and GLOBE researchers could provide an influential outlook on the major factors characterizing global cultures (Luthans and Doh, 2009). GLOBE measure both cultural practices and cultural values (House and Javidan, 2003).
Hofstede developed his dimensions of national work culture that he distinguished between a large number of cultures within one organisation. It is interesting to note that he makes the claim of Universality of these characteristics, but says little about their impact or outcome (Denison and Spreitzer, 1991). Also, Hofstede has contradicted his own study of Universal applicability of these dimensions by doubting the differences observed in different countries. For instance, in weak uncertainty avoidance countries, like USA, UK, Sweden, managers and non-managers may feel uncomfortable with rigid rules and regulations. Similarly, in high uncertainty avoidance countries like Latin world, they might still feel uncomfortable because of unstructured and improper framing of rules and regulations (Hofstede,1994).
Hofstede has considered merely four to five countries, which is seen as insufficient and several important dimensions seem to be missing. Hofstede himself admitted: "it may be that there exist other dimensions related to equally fundamental problems of mankind which were not found because the relevant questions simply were not asked" cited in (Hofstede, 2006). The dimensions were based on the survey extracted out of the employees working in the local subsidiaries of IBM who were similar in every aspect apart from nationality (Luthans and Hodgetts, 1994). They shared a single monopolistic 'organizational culture' common between and within every IBM subsidiary (McSweeney, 2002). Hence, Hofstede's research has been criticized because of narrowness of the population surveyed
Hofstede has made a few additions here and there to his dimensional model on a few occasions. He also added a fifth dimension of 'Long versus Short Orientation' which was related to deferment of gratification. However he has never acknowledged any significant errors or drawbacks in his research (McSweeney, 2002).
Hofstede critiqued the GLOBE analysis, pointing out key differences between the research methods; Hofstede was the sole researcher and writer of his findings, while GLOBE consisted of a team of perspectives. Hofstede focussed on one institution (IBM) and surveyed employees, while GLOBE interviewed managers across many corporations, and so on. The disparity of the terminology between these two, coupled with the complex research, makes it challenging to compare and fully reconcile these two approaches.
(Luthans and Doh, 2009)
GLOBE not only adopted Hofstede's dimensions paradigm, but they also started from those dimensions and for conceptual reasons expanded it to nine. GLOBE's network and respondent were very international, but its project design and analysis still reflected US supremacy. The main concern about the GLOBE research is that the questionnaire items used might not have captured what the researchers expected them to measure. GLOBE research does not show how exactly its cultural dimensions were operationalized (Hofstede, 2006).
The GLOBE analysis is sometimes seen as complicated, but so are the cultures and perceptions. An in-depth understanding of all facets of culture is difficult, if not impossible, to attain, but GLOBE provides a current comprehensive overview of general stereotypes that can be further analyzed for greater insight (Luthans and Doh, 2009). Hofstede in particular, often confused values and behaviours (practices) in his dimensions, which is a further weakness of his framework. While GLOBE provides data on the societal level, it does not do so on the individual level. The items used in the GLOBE project are designed to reflect societal values and practices, not individual values and practices (Terlutter et al., 2006).
A major limitation of the GLOBE study is its relatively small sample, with an average of only about 250 subjects per culture. GLOBE researchers report that the number of respondents ranged from 27 to 1,790, though more than 90% of the cultures investigated had small sample sizes of 75 respondents or greater. While 17,300 total respondents is indeed a large figure, it is still a small sample for describing societal values and practices in 62 different countries. The other discussed frameworks are all based on significantly larger samples (Terlutter et al., 2006). A second serious limitation is that respondents were middle managers in corporations, i.e. only a single group within each culture was analysed (Terlutter et al., 2006).
The GLOBE researchers' main hypothesis was that each organizational or societal culture will be associated with a specific set of beliefs about leadership.Â They wanted to show that societal and organizational culture influences the kind of leadership found to be acceptable and effective by people within that culture (Grove, 2005).
Though, the GLOBE project was conducted after the analysis of some 62 countries, it was suitable/ the result suited only specific societies. Its implementation is not actually Universal.
The theory does not accommodate or account for cultural change. For example, exposure to international media, cross-border commerce, international political and economic competition, or other forms of cross-cultural interaction may introduce new competitive forces and new common experiences, which may result in changes in any of the culture or leadership variables described above (House et al,) http://www.thunderbird.edu/wwwfiles/sites/globe/pdf/process.pdf
CASE STUDY DISCUSSION
JP Morgan Chase Bank India
JP Morgan Chase (JPMC) is the U.S. consumer and commercial banking businesses that serve customers under the Chase brand. It has its operations extended over the globe. However, its commitment to India is well established. The Indian branch mainly looks after the processing of foreign payments, credits and other banking operations.
Hofstede's Power Distance Index(PDI) shows India as a high power distance country (PDI 77) as compared to the US and Britain (Hofstede,1994). The emotional distance between subordinates and their bosses is large: subordinates are unlikely to approach and contradict their bosses directly (Hofstede,1994). JP Morgan in India is not an exception to this. Although it is a US based employer, the operations in India are influenced by the Indian culture with a slight blend of the western culture as most of the employees working here are local Indians, including the senior management. It has a very good structured hierarchy for each and every function handled. Even though, most Indian businesspeople speak English, many of their values and beliefs are markedly different from those in the West (Luthans and Doh, 2009).
Culture at JPMC
The above diagram represents the culture at JPMC Bank from all the aspects. Diversity is encouraged here. Opportunity is given to individuals of any race, nationality, gender, sexual orientation, or physical ability have the opportunity to excel based on their performance and contribution to the firm. The Organisation follows a 'Collectivist Feminine Culture'. There is a good working relationship between subordinates and their superiors. Individuals are encouraged for new ideas and opinions. The workplace tends to be more characterised by low stress, and managers give their employees more credit for being responsible and allow them more freedom. (Hodgetts).
I worked for the Cash Processing Management (CPM) team which is mainly responsible for the International credits into the bank. All the crucial customer data is managed by different teams and there is no direct contact with the customers. Team working is a significant culture in here and this helps in building trust and develops team cohesion. Because members of diverse teams tend to have difficulty agreeing on their purpose and task than members of homogeneous groups, the team leader and manager help the group identify and define its overall goal (Luthans and Doh, 2009). This common goal/objective is for the entire team to achieve, conversely, there is division of work between the team members. Members are accustomed to working in different ways sometimes creating disagreements and conflicts and leading to unhealthy competition within the teams itself. However, managers support and leverage the core values and other motivational factors like team attachment and membership through empowerment, mentoring and support of teamwork. A mistake by any team member makes the entire team answerable.
Jamie Dimon the CEO of JPMC Bank - "Creating a winning team and a self-sustaining culture takes hard work, and there is no substitute for it. Our teams do not win because they have a new stadium or the best uniforms. Some of the best teams do not even have the best individual athletes. Teams win because they are disciplined, they work well together, they execute consistently and they have a passion to win."
The organisation culture values productivity, achievement, and competition towards all its employees. Every department sets a specific 'benchmark' for its employees on the basis of varied criteria and keeps a track of it regularly. Every month, individuals exceeding this criteria with minimum errors are declared as the 'ZING' (Zealous, Innovative, Nouveau, Go-getter) stars for the month. However, there becomes a problem sometimes of integrating different cultures and practices (Kirkbride, 1987). Performance appraisals are held twice a year. The senior management and the employees exchange feedbacks and discuss the problems/ issues faced. Bonus is granted to every individual after the appraisal on the basis of individual and team performance. Incentive plans create a proper balance of individual and collective accountability.
Too much flexibility or spontaneity can become a chaos; to much order and control can result in rigidity. But balance in culture represents the capacity to respond to a wide set of environmental conditions (Denison and Spreitzer, 1991).
Once the group is performing, there must be consensus on how to judge its own performance in order to know what kind of remedial action to take when things do not go as expected (Frank, 1987).
This occurs because people in groups share a great deal, including their environment, past history, recent experiences, common challenges, systems of reward, philosophic or religious beliefs, core values (Grove, 2005).
Organisation & employee performance
An organisation's culture encompasses everything it does and everything it makes (White, 1984). It affects not only the employees to perform but also the organisation in performing. The perceived association between organisational culture and productivity is so high that organisations in the West often adopt collectivist values with the objective of promoting productivity (Goncalo and Staw, 2006) as cited in Matthew (2007).
When we speak of the culture of an organisation, we refer to the behaviour patterns and standards that bind it together. Some organisational cultures encourage productivity; many do not (White, 1984).
Corporate culture emanates from the top. It is top management's responsibility to recruit, train, teach, and coach managers so well that they in turn provide desirable role models for the employees in their charge. In other words the way these managers behave, the way they lead, the way they think, sets a climate and ultimately a culture for success. Executives, from the top down, must realise that people are unique and that they are frequently irrational and always complex (White, 1984).