Pakistan and its culture Primary Research

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Pakistan is an agricultural based country which is in the process of transforming into services-based sector. It's possesses highly distinctive cultural values as compare to other countries in the region, which has been increasing developing highly skilled and literate work force with the ability to read and write English, privatization of government institutes, open investment policies for the foreign companies and have a highly strategic importance in Sub-Continent. As being the seventh largest populated country in the world with growing population rate of 2.09%, in which the total number in the work force is estimated at 46.84 million with a growing figure of unemployment rate is 8.3%. Pakistan since it came into being has suffered heavily due to the political instability, social disorder, violation of law and order, terrorism, extremism and corruption. In the agriculture sector forty-four percent of work force is employed which gives 23% GDP; while the service sector provides 53.3% GDP, the service labour force of 23% is quite low for any country who in the phase of developing. (GOP 2006, Khilji 1995-1999)

Pakistan is a blend of different public institution, of Islamic law and western influential culture which is widely bought by the practices of the foreign companies or it's widely said in Pakistan as the MTV (Music Television) culture. These western practices have been impacting on Pakistani culture in every aspect of daily life of an individual or group. Pakistan is keen to eliminate British inheritance in its employees and the business setups (Khilji 1995, 2002). To build an appropriate and secure business atmosphere, introducing strategies to increase economic growth and to change the old long fashion of nationalization, the country's administration has privatised and transformed the public sector for example the privatisation of Habib Bank and Steel Mills of Pakistan.

Important and necessary decessions have been taking to privatize the whole public sector including financial institutions and industrial units with rewards/ incentives to private investors. (Khilji 2002; Budhwar 2001; Hassan 2006 and GOP 1999).

Several programmes have been introduced at the provincial level. Government of Punjab recently launched policies (GBRI Gender Responsive Budgeting Initiating) considering sexual characteristics sensitivity to make sure the interest and necessity of males and females. Recently conditions are changing, as Pakistan government has welcomed the role of women in the economy at the national level which is a big move, create equal opportunities among men and women. ( Hassan 2006; Khilji 2002).

Pakistan Business Culture

The Pakistani business sector is always been different as a kneejerk management culture with strong interference of political parties rather based on appropriate business decisions. The private sector always been pushed to extend forward looking management systems. The public sector has been positively affected by the positive initiatives of the private sector. Therefore Pakistani administration has decided to vary the established corporate sector of the public sector by assigning selective team of professionals at the upper levels of hierarchy. This will help to changed the culture of making it meritocratic, decentralized and responsive to employees necessities. Additionally Pakistan 2010 program which main objective is to create and to exploit latest work culture consists of, discipline, excellence and innovation. On the other hand in recent times it was dampened by the nuclear test conducting by Pakistan in May 1998 which resulted in sanctions by G-7 and other countries which do business with Pakistan (Khilji 1999, 02; Budhwar 2001; limi 2004 and Khan 1996)

Investigation by Khilji (1996) illustrates that in Pakistan foreign companies have integrated business and HR focussed approaches that take cultural and structural changes into consideration. Organisations and their HR policies have broadened in regards to other businesses and the new communications links. However most of the business including locals take on these policies in order to be competitive in market. In his investigation, Khilji (1995), indentifies that after the privatisation of businesses in the era of mid-90s. Most businesses today are taking on the new western system of paying rewards for performance, training seminars, management by objectives (MBO) and the fair appraisal system. Although these changes are only been followed in some private firms and most of the public and private companies are still in the process of adopting it. (Khilji 1995-1999; Budhwar 2001 and Bonaccorsi di Pati E & Hardy 2005)

Regardless of the efforts, majority of the local business have experience lack of HR practices and policies within employees, breach between manager's policies and their implementation, common structured and the communication with the hierarchy from top to bottom. Majority of the member of staff showed dissatisfaction with current norms and practices. (Bonaccorrsi di Patti e & Hardy, 2005; Bird et al. 2004 and Khilji, 2002).

Due to the strong bureaucratic management, political interference in the establishment of management policies unnecessarily staff hiring, the local business environment has been economically slow. Managers are pressurized to employ staff by political involvement which also included the pressure of the business unions, cast systems and also by personal recommendation by high class management, but not necessarily by merit. (Khilji1999; Bonaccorsi di Patti e & Hardy 2005). HR managers and the management has been unsuccessful to perform their duties in the proper implementation of systems which has the appropriate training requirement, assessment and career advancement of employees.

Cultural practices of Pakistan and businesses are changing drastically sine mid 90s, privitisation, nuclear test and G-7 santions. (GOP 2006; khilji 2002; Budhwar 2001 and Bhatnagar & Sharma 2005).

Regardless of all these in-house issues, global companies, especially banks are playing a vital role and taking positive approach and are accountable for introducing latest technology, work systems, development for employees, competitive salaries, appropriate HR practices, fines recruiting processes and are benchmark for local businesses.( Ahmed 2006; Hassan 2006 and Khilji 1999).

Pakistani Corporate Culture

The Pakistani corporate cultural is considered as highly collectivist, associative and having high uncertainty avoidance, high power distance, (Hofstede 1980; 1991; Trompenaars, 1994 and khilji 1995). There is a general absolute respect for the higher authorities. Pakistani people are mixed as a group emotionally. They are halfway through accruing both masculine and feminine qualities (Hofstede 1980, 1984 and 1991).

The local demonstrates both the tougher qualities link with men (aggressive, ambitious and competitive) and feminine qualities (modesty and caring). Khilji (1996) investigation suggested that business culture is more towards the masculinity with a very high short term orientation

wthin managers and its employees. Khilji (1999) also tells that in-spite of having high power distance, a participatory style of management in growing in status within managers and its employees.



Power Distance





Long Term Orientaition




















Organizations operating in Pakistan have higher levels of hierarchy, formal structures and centralized HR management. Decisions and policies are made at the head offices and then implanted by the offices in division and regions.(Bonaccorsi di Patti, & Hardy 2005); Bird et al, 2004 and Khilji 1999). There is no appropriate or direct approach to HR or higher authorities, which causes less autonomy and daunts self learning skills in employees. Mostly the company's policies are made without the opinion of the employees this occurs due to huge gap of communications among the employees and the management. The local employees are not pleased or happy with this approach when HR department making their own decision without consulting them and implementing on them which results in a low level of trust among them. The local employees of Pakistan are now moving towards more individualistic relationship with organisations. (Bird et l, 2004; Ashraf & Ghani 2005; Khilji 1999;2002 and |Trompenaars 1994).

Pakistani culture and its affecting Factors

The culture of Pakistan illustrates as a blend of religion, british inheritance, American influence and Indian origins.( Khilji 1995, 1999,2002 and Budhwar 2001). Anywhere in the world education, family and religion practices influences the tactics and practices of any businesses. The selection and recruitment of any company is mostly organized in a way that the company's structure and system reflects these typical national patterns. (Tayeb, 1988; Black, 1999; 2001a and Carroll et al. 1999)


Pakistan was established on the foundations of Islamic practices and at present 95% of the local population is Muslims as religion was the most significant reason in the formation of Pakistan, as an emerging from the Muslims nations there belief was to practice there religion Islam free and originate an Islamic system in a country emanating from the teaching of the Holy Quran. ( Tayeb 1997 and Khilji 1995,1999).

Islam has made huge impact on the short history of Pakistan especially in economic, legal and educational system of the country particularly after Russia-Afghan war. Tayeb (1997) argues that Islam influences national culture, which also affects the organisational and HR practices especially in a huge Muslim country which has a 95 % of Muslim population. On the other hand Khilji investigation (1999) shows that this is not in the case of Pakistan, Islamic Influence in Pakistani businesses is limited to some extent and they more worried about with external shell not the central part of Islamic beliefs.

Indians Origins

The majority of the cultural practices, traditions and community set-up is come from the Indian origins. Education system in the country is authoritarian set-up, thus making common people accepts authority indisputably and more importantly social system in Pakistan is family- centred. (Khilji 1995 and Tayeb 1988).

British inheritance

The British ruled the sub-continent for over a century and they have played vital role for creating an elite class society by building Gymkhanas for social meetings and other leisure facilities which differentiate them from the common people, Feudal system and civil servant culture system in the Pakistani society. This elite category creates gaps between the common people and the high upper class society. The elite class comprises of status, money, class and power which is unable to respond to the people's needs. (Khilji 1995, 2002; Limi 2002). These classes are commonly found in the local as well as foreign companies operating in Pakistan. The business graduates and marketers are considering being better than the managers, employees and over non-managers. The elite class get high incentives, service rewards, frequent promotions, free medical treatment and good opportunities for expanding their careers. The new business graduates don't get any appropriate training by their senior and experienced staff many often as they are getting paid more then them. As a result these partiality systems can be found in various practices and policies at any level in business organisations in Pakistan (Khilji 1995, 1999; Bonaccorsi di Patti & Hardy 2005).

American influences

Khilji (1995 and 1999) noticed that business culture of Pakistan like to follow the management practices of USA. Pakistan has played a key role in supporting war-on-terror imposed by USA on Afghanistan and in particularly against terrorism. Moreover USA have played major role in Pakistani politics and setting up the Pakistani governments in past and present. As mention before they play an anchor's role in Pakistani politics and played a vital role in forming the governments, economic and foreign policies of the country. US support to Pakistan increased drastically in particularly during the Afghan-Russia war, when Pakistani soil was used regularly to formulate strategies against the Soviet armed forces and with the support of local tribesmen of the frontier region of the Pakistan and Pakistani army, the Russians lost the war and break into small soviet states. Therefore American culture is more often found in any institutions, entertainment media, social life and schools in Pakistan. Khilji (1995 and 1999) says that American business practices is more result oriented and more progressive while British business practices are slow and bureaucratic which the business culture and civil services of Pakistan has adopted.

The above discussed factors affects the not only the foreign companies but also their strategies, operations and their human resource practices. All foreign and local companies in the country needs to manage these cultural differences especially recruitment and selection process in order to get the best worker according to their business needs and more over to obtain high results.

The banking sector of Pakistan

In recent times Pakistan has witnessed rapid growth in the banking sector this have occurs especially after the privatization of several industrial and financial institutions since mid 1990s. According to the report of SBP in 2008, there are overall 47 banks operating in Pakistan which has 8,343 branches nationwide. Recent acquisitions and mergers of financials institutions have also attracted several foreign companies to invest money in the financial sector of the company. At present these all the privatization of national banks incorporated private banks who own half percentage of the national banks have change the picture of banking sector. Recent transformation of structure and policies which is likely to raise minimum capital requirement has also been changed which will affect competition by reducing the number of market players in the sector. Due to the favourable, attracted policy of Pakistani government foreign financial groups have invested heavily and they have welcome the financial policies from the government which has created immense competition among the local banks and with foreign banks to retain the market share and expand their business by taking over small banks, by merging and acquiring small banking and become a big huge single bank in order to fulfil the requirement of the State bank of Pakistan. (Hassan 2006; Ahmed 2006 and Khilji 2002). Latest technology and innovative ways of expanding the business are been used regularly by these institutions to remain competitive in the market. Due to the ongoing expansions, recruitment and selection of right candidates is taking place according to the market need and culture requirements.

Pakistani banking sector has developed rapidly and strongly after the political stability and privatization of the national banks and financial institutions in 1997. The government have finalised several financial deals to expand and develop the financial sector. The economic growth of Pakistan has frequently expanding and showing average of around 7% annually. (GOP 2006). This will give opportunities for creating more jobs, developing more SMEs, building more industries which will bring more stability to the country. (EU 2002). With frequent good performance from the banking sector and particularly from the foreign banks have created more opportunities for the local business to expand business, global companies have invested heavily and the quality of the services provided by the foreign companies have improved which also forced local banks to improve the standards of their services. The continuous success in the banking sector has forced the local banks to enlarge their operation abroad in particularly in Middle Eastern countries. World Bank (2007) report shows that Pakistan and India is the best performer in the Asian region for carrying out their business practices. (World Bank 2007 and Hassan 2006-07). Moreover after the introduction of Islamic banks and the banks who have started doing Islamic banking have created tough competition among all the competitors in order to satisfy customer needs. (Ahmed 2006)

I have selected a small sample of different banks for my primary research in my dissertation. In which four of them are top local banks and the other three are the top foreign banks in the country.

Prior to our brief analysis, I will describe these banks briefly.

Local Banks

Bank Alfalah Limited

Bank Alfalah limited was formed in July 1997 after the privatization of Habib credit and Exchange bank (HCEB). The UAE Royal family, Abu Dhabi consortium and some leading UAE businessmen acquired more than 80% of HCEB shares. After acquisition, HCEB was renamed to BAL. Strong backing of UAE royal family, and open and welcome investment opportunities from the government of Pakistan leads this bank to be one of the topmost Middle East owned bank in Pakistan. It started from 3 branches in Pakistan to currently 282 branches in 117 cities across Pakistan, with more than 5 international branches in Bangladesh, Afghanistan and Sri Lanka. It also acquired Shamil bank of Bahrain (Bangladesh operations). It also started its subsidiary in Pakistan as bank Alfalah Islamic banking under Sharia laws. Bank Alfalah offers, consumer, retail, corporate, investment banking, treasury, and consumer financing. (

Soneri Bank Limited

Soneri Bank Limited was formally incorporated on September 28, 1991. The first Branch commenced operations in Lahore on April 16, 1992, followed by the launch of Karachi's first Branch on May 09, 1992. The bank currently operates 158 branches, spread all over Pakistan including the Northern Areas of the country. The bank's expansion policy is based on the principle of maintaining a balance between the urban and rural areas.


Habib Bank Limited.

Unquestionably HBL is the largest bank and leader in Pakistan's financial service and banking industry. Its is known to be symbol of pride for Pakistan, it started its operation in 1941 in Bombay (Mumbai, India), later shifted to Karachi (Pakistan) in 1943 on the request of Muhammad Ali Jinnah (founder of Pakistan) on its initial performance. HBL have an extensive network of 1425 local branches and 55 foreign branches (USA, UK, EU, Asia Pacific, and Africa) through out the world providing comprehensive customer services. Its Headquarter is in Karachi, Pakistan. HBL plays a central role in the financial and economic development of Pakistan. It was under state ownership from 1974 to 2004, later privatized in 2004 and sells its 51% shares to Aga Khan Fund (AKFED) for Economic Development and remaining shares will be sold by Govt of Pakistan. HBL is offering services in commercial and corporate banking, investment and international banking, retail, treasury, loans, consumer financing and Islamic (Modaraba) banking. (

United Bank Limited

Beside HBL, UBL is also one of the largest commercial bank in Pakistan. It was established in November 1959. UBL have a wide network of branches with over 1056 domestic and more than 15 international branches (USA, UK, EU, and Middle East). It gives a direct and comprehensive range of international banking facilities. It is also showing a healthy and strong performance in all the major divisions of business operation after its privatization in 1997 which brings UBL producing assets of Rs. 380 billion. Its HQ is in Karachi, Pakistan and offering services in consumer, commercial, corporate, investment banking, treasury, consumer finance. (