Corporate CultureCorporate Culture

What is it?

Elements of Corp. CultureElements of Corp. Culture1. Business Environment

• What is it’s market?

2. Values• Beliefs of the Co. which define success and establish

standards

3. Heroes• Embody the culture’s values

4. Rites & Rituals• Systematic routines of day-to-day• Exemplify expected behavior

5. The Cultural Network• How values are communicated through the company. How to

understand what’s really going on.

Starbucks in MacauStarbucks in Macau

Starbucks in MacauStarbucks in Macau

Starbucks in MacauStarbucks in Macau

StarbucksStarbucks1. Business Environment1. Business Environment

Starbucks purchases and roasts high-quality whole bean coffees and sells them along

with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories

and equipment -- primarily through its company-operated retail stores.

Starbucks - 2. ValuesStarbucks - 2. ValuesEstablish Starbucks as the premier purveyor of the finest coffee in

the world while maintaining our uncompromising principles while we grow.

The following six guiding principles will help us measure the appropriateness of our decisions:

1. Provide a great work environment and treat each other with respect and dignity.

2. Embrace diversity as an essential component in the way we do business.

3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

4. Develop enthusiastically satisfied customers all of the time.5. Contribute positively to our communities and our environment.6. Recognize that profitability is essential to our future success.

Starbucks - 3. HeroesStarbucks - 3. HeroesHoward Schultz

Grew up in working-class Brooklyn.His father never made more than $20,000 a year and the family lived in

government-subsidized housing, which gave Howard an intense drive to succeed. In his late 20s, working in sales for a company in New York City, Schultz visited a client firm called Starbucks, then a small Seattle purveyor of coffee beans. It was love at first sight. He's a man who

lives via revelation, not analysis, and he follows up on each epiphany with unwavering conviction.

McDonaldsMcDonalds1. Business Environment1. Business Environment

It is one of the world’s most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eatin-out market in virtually every country in which we do business.

Serves the world some of its favorite foods – World Famous French Fries, Big Mac, Quarter Pounder, Chicken McNuggets, and Egg McMuffin

McDonaldsMcDonalds2. Values2. Values

We're not just a hamburger company serving people;we're a people company serving hamburgers.

For McDonald's to achieve our goal of being the world's best quick service restaurant experience, we must have the best experience for all McDonald's employees. So we formalized our beliefs into our People Vision and our People Promise.

Our People Promise is how we remind our people what they can expect and how high our goal is: To be the best employer in each community around the world.

McDonaldsMcDonalds2. Values (cond.)2. Values (cond.)

People Vision Defines what we strive to be as an employer.

Simply put, we aspire to Be the Best Employer in Each

Community Around the World.

People Promise To the 1.5 million people who work at McDonald's

in 119 countries around the world, and to all futureemployees, we want you to know that: We Value You, Your Growth

and Your Contributions.

“Our culture supports our vision”

1. We Care – We want to have lifelong relationships with our customers. We seek to understand, meet their needs, care about our employees, and are concerned about our environment

2. We Innovate – We create, build and market innovative solutions; constantly looking for new and innovative ways to work and new ways to spark new innovation

3. We uphold – Quality: we produce reliable products, but quality for us also encompasses the quality of the experience of using the product as part of a total solution that delivers lifestyle benefits.

4. We Celebrate – Enjoyment: We aim to bring enjoyment and pleasure to our customers as we celebrate the beauty we see in life.

Corporate CultureCorporate Culture

System of RewardsHiring DecisionsManagement StructuresRisk TakingPhysical Setting

National Cultural InfluencesNational Cultural Influences

Asians place a high value on concepts associated with social harmony, while Westerners put greater emphasis on individuals’ rights and responsibilities.

There is no escaping the fact that a national culture HELPS shape corporate responsibilities, practices, and traditions.

Cause and EffectCause and Effect

…the type of organizational structure that has emerged across Asia is one of a very hierarchical, bureaucratic corporation that values such intangibles as “respect for learning” and “honesty.”

Profitable Corp. CultureProfitable Corp. Culture

Does it have any measurable impact on a corporation’s bottom line or staff behavior?

Strong Corporate CultureStrong Corporate Culture

Clear sense of identity for staffClarifies behaviorClarifies expectationsMakes decision making fairly easy because

so much is already defined

Weak Corporate CultureWeak Corporate Culture

Employees will “vote with their feet”Decisions are hard to make and wrong

decisions are easily made

Views of SuccessViews of Success

The main goal of any corporation is to be successful.

How you define success will have an impact on how you organize your business and its culture.

Cultural DifferencesCultural Differences

China and America– Is salary talked about?– How do vertical relationships affect promotion?

Societal and I nstitutional Differences

Aspects China US

Ethnic Culture Centered around "relationships"

"Reclusive", each minding his/her own business (especially with "strangers" and people outside of the relationship network)

Centered around "individuals"

"Messianic": "let's save the world"

Source of Trust

Trust those around you; don't "lose face" and credibility by failing to live up to written or oral agreements

Trust the contract; don't get into legal hassles by not fulfilling the agreement

Business Culture

Quiet and reserved; clumsy communicators

Outspoken; eloquent; effective communicators

Societal and I nstitutional Differences

Aspects China US

Negotiation Style

Group decision; final say by the "boss"

More individual authority and distributed decision making

Dealing with Business Counterparts

Indirect; courteous; take things personally; long memory for both favors and humiliations

Direct; more matter-of-factly; memory for conflict superceded by business objective

Ability to Make I mmediate Response

Weak Strong

Value Differences

Aspects China US

I nterpersonal "Relationship" comes first "Economics" comes first

What Commands Respect

Respect for seniority, wisdom, ability

Respect for success, achievement, wealth

On "Family" Children should learn to respect the elder, love the young, and rely on the "extended family"

Children should learn to be independent

On "the Strong" and "the Weak"

I t is not righteous to bully

I t is an honor to win; business is all a competition; it is only natural that the weak is preyed on by the strong

Value Differences

Aspects China US

Discipline (in following procedures and schedules)

Strong Depends on the individual

Tolerance of Diversity / Openness to Alternative (possibly opposing) I deas

Openly - very receptive; but actually, less so

More open

Shame or Humiliation

Long memory; need and urge to exonerate

Tends to be superceded by business priorities

Priorities Mixed: business, individual, factional, nationalistic, and political

Almost strictly business

Geert Hofstede’s ResearchGeert Hofstede’s Research

A corporate/organizational level of culture is achieved according to the way employees have

been socialized by their work organization. Power Distance Individualism Masculinity Uncertainty Avoidance Long Term Orientation

Power DistancePower Distance predicted upon:

– geographical latitude– population size– nation’s wealth

Low Power Distance High Power Distance

The use of power should be legitimateand is subject to criteria of good and evil

Might prevails over right, whoever holdsthe power is right and good.

All should have equal rights The powerful have privileges

Power is based on formal position,expertise and ability to give rewards

Power is based on family or friends,charisma, and ability to use force.

Individualism vs. CollectivismIndividualism vs. Collectivism Individualist items:

– Personal time– Freedom– Challenge

Collectivism Individualism

Collective interests prevail overindividual interests

Individual interests prevail overcollective interests

Private life is invaded by groups Everyone has a right to privacy

Opinions are predetermined by groupmembership

Everyone is expected to have a privateopinion

Hiring and promotion decisions takeemployees’ in-groups into account

Hiring and promotion decisions aresupposed to be based on skills and rules

only.

Collectivist items:TrainingPhysical conditionsUse of skills

High PDI Low PDI

Masculinity vs. FeminityMasculinity vs. Feminity Statistics showed relationship between masculinity

and age. Young men and women tend to be more masculine, wheras the older men and women tend to be more feminine.

Feminine Masculine

The needy should be helped The strong should be supported

Everybody is suppose to be modest Men are suppose to be assertive,ambitious and tough

Work in order to live Live in order to work

Manager, Cooperation, living area, employment security

Earnings, recognition, advancement, challenge

Uncertainty AvoidanceUncertainty Avoidance Relationship between the strength of uncertainty

avoidance in a country and the maximum speeds allowed in freeway traffic in that country.

Avoid uncertainty less Avoid uncertainty more

Low stress; s ubjective feeling of well-being

High stress; subjective feeling of anxiety

Comfortable in ambiguous situations andwith unfamiliar risks

Acceptance of familiar risks, fear ofambiguous and unfamiliar risk

Citizen protest acceptable Citizen protest should be repressed

Citizens positive towards institutions Citizens negative towards politicalprocess

Tolerance and moderation Conservatism, extremism, law and order

Long Term OrientationLong Term Orientation Long term:

– Persistence/perseverance– Ordering relationships by status and observing this order– Thrift– Sense of shame– Respect for traditions

Short term:– Personal steadiness and stability– Protecting your face– Respect for tradition– Reciprocation of greetings– Favors & gifts– Adaptation of traditions to a modern context