GLOBAL CORPORATE CULTURE:

AN IMPORTANT FACTOR IN INDUSTRY COMPETITIVENESS

DR. FERMIN G. CASTILLO, JR.

ASSOCIATE PROFESSOR-PHILIPPINES

fgcastillojr@yahoo.com / fgcastillojr@gmail.com

ABSTRACT

Every major industry was once categorized as a nicher industry. Some survives and other

fails, the growth of electronics industry in the world can be attributed to the high demand of

this product/commodity. We are now in the 21st century and this era is known as the “Asian

Invasion”. The global environment that surrounds the electronics industry favors the Asian

countries as they show the world what they’ve got. The Philippine electronics industry is one

of the Asian countries who benefited from this global movement of technology and

resources. Being the front liner in the export industry, a good corporate culture provides

favorable and marketable climate in the global scene. The research are based on historical, investigative and descriptive analysis of the global corporate culture of electronics industry in

the Philippines. As dominated by multinational corporations carrying different international

flavor mixed together and applied in the Philippine settings for global perspective.

And lastly, the lesson of success and story of electronics industry serve as a historical era to

any industry in the world as they climb the leverage of success.

Key words: Global Corporate Culture, corporate culture, corporate commitment,

electronics industry

INTRODUCTION

The development of global corporate culture is for most corporations the last step in

the integrated approach to globalization. It is not just a matter of doing business

internationally or even having subsidiaries abroad.1 It requires process and

mechanism that will create a successful global corporate culture. Many strategies and

framework have been develop thru the years to determine what paradigm is applicable

to any industry.

Different industries all over the world have their own unique and distinct culture

possess as the result of globalization. In a global perspective the industry must

understand their competitive advantage they have. Those advantage will serve as their

passport to higher perspective in a changing world.

Most companies begin their globalization effort with changes in strategy and structure

and some initial training of people for intercultural assignments.2 But international

corporations can only “decompose” their structures, as Kenichi Ohmae calls it, if they

have a deeply and universally held set of values to put in its place (Ohmae, 1989, p.

46). 3All organizations need some form of structure within which to operate. If this

structure is not physical, then it needs to be based on shared values, beliefs, behaviors

then that is, a strong corporate culture.

Establishing a global corporate culture for an industry is recommended because it

benefits the whole industry as well as the culture that the host country have. Creating

a global corporate culture is a long process and requires dedication from companies

engaged in this industry. In the end the fruit of their labor will be harvest in its success

in the ever-changing world.

Model of an Industry based Global Corporate Culture

In studying the diversity and complexity of culture the framework model must be

established in order that each firms must be guided in their actions and output. It serve

as a paradigm that will direct the industry on how to arrive that certain global culture

that they intend to achieve. To begin the paradigm it begin with STEP or PEST as

they called it in Wikipedia as PEST analysis stands for "Political, Economic, Social,

and Technological analysis" and describes a framework of macro-environmental

factors used in environmental scanning. 4

The study uses the acronym STEP to serve as a guide for the corporations in

establishing their core group in order to arrive to the global corporate culture they

intend to achieve. First and foremost we have to identify the environmental factors

that affect the industry both internally and externally. Then SWOT analysis will help

1 A Manager’s Guide to globalization –Six Keys to Success in a Changing World, Stephen H.

Rhinesmith, American Society for Training and Development, IRWIN 1993 2 Ibid

3 Ohmae, Kenichi, Beyond National Boarders. Homewood, Ill: DowJones-Irwin, 1987 4 http://en.wikipedia.org/wiki/PEST_analysis 2007, Armstrong. M. (2006). A handbook of Human

Resource Management Practice, 10th, London

them to identify the hidden opportunities that will make the industry more

competitive.

Globalization also opens the door to the electronics industry which makes the

export industry becomes the country’s front liner. In the modern trade practice, an

apparent picture of global interrelationships and interdependent has emerged. Factors

of production like land, labor, capital and market are becoming interdependent as

business entities increasingly consider their marketplace area as global trend rather

than local. As globalization exists corporate culture must be adept with the current

trends in the global market because now a days everything happened here has its

correlation with other parts of the world.

Culture is the set of important undertakings that members of a community

share in common… These shared undertakings consists of ethics, perception, norms,

values, standards, attitudes, beliefs and the community in question may be as wide as

a society or industry, or as narrow as a company departments/units or particular work

unit to be applied with.

Every industry has its own culture; in fact, every organization has a culture. A

corporate culture is similar to an individual’s personality. Because of the very unique

identity of such industry and or organization that particularly culture which will lead

to a higher production output and even industry competitive advantage. We cannot

deny the fact there are a lot of assumptions, beliefs, values, norms within the company

itself as its distinct personality of the individual influences a person. Figure 1 explains

and suggested a model paradigm of an Industry based Global Corporate Culture.

Figure 1: Model of an Industry based Global Corporate Culture

A well-built culture is an influential stage for guiding behavior, it assist

employees do their work better, and as highlight by Deal and Kennedy, culture has

two functions:

S S

T W

E O

P T

Corporate Setting

Shared Values

Beliefs

Behavior

Organizational

Characteristics

Innovation

People Oriented

Team Oriented

Quality Emphasis

Customer focus

Global Corporate Culture

Corporate

Commitment

Industry Corporate Culture

“A strong culture is a system of informal rules that spells out how people are

to behave most of the time. A strong culture enables people to feel better about what

they do, so they are more likely to work hard.”5

In this case it really point out that organizational culture is a dominant power

in any organizational and it can outline the firm’s overall effectiveness, efficient and

long range triumph.

Electronics industry is in its maturity and we must establish a good reputation

for the industry since it has been known to be the country’s front liner. A good culture

for an industry serves as advantageous on part of any investors since it creates a

favorable climate to them as well as attractive area for the organization which

provides materials, financial investment, including technology and other useful

resources that favor the electronics industry. The growth of electronics industry can

also be attributed to the growth of microelectronics (Castillo, 2006). 6

In a study conducted by F. Castillo about the corporate settings of the

electronic firms, when he surveyed 325 firms and 263 of it responded to his question

on” What is the shared values, beliefs and behaviors of the firms in the electronics

industry?

There is a 82.40% similarity in terms of their shared values, beliefs and

behavior based from the answers of the 263 respondents which is account to 80.92%

similarity rate. This study anchors that in the electronics industry the shared values,

beliefs and behaviors of the employees engaged in this aspect is highly significant.

Furthermore, the study suggested a key role of HR in the process of a corporate

culture in the electronics industry.

Organizational characteristics

Since electronics industry has diversified organizational setup the prototype

and typical set up of this manufacturing business are identified based from historical,

observation, and data provided by corporate firms. Innovation, people oriented, team

oriented, quality emphasis, customer focus are the most common characteristics

which are so common to this MNCs.

Given that variables the corporate settings are highly important because it

corresponds and contributes to the electronics industry’s characteristics. While it is

clear to understand that organizational characteristics requires serious commitment

and participation by the employees. Their input will serve as contributory element for

development and success of each firms. And in the long run as contributory factor to

the industry’s organizational characteristics.

Corporate commitment

5 Deal, T. E. , Kennedy, A. A. Corporate Cultures, Perseus, 2000 6 Castillo, F.G. Jr. The Philippine Microelectronics Industry: Strategies for ASEAN Competitiveness:

DBA dissertation, Pamantasan ng Lungsod ng Maynila, November 2006, Manila, Philippines

There are a lot of studies in corporate and organizational commitment where it can

defined as “the relative strength of an individual’s identification with and involvement in

a particular organization” (Steers,1977, p. 46). Research in the organizational

commitment has shown that there is a positive relationship between corporate ethical

values and Organizational Commitment (Hunt, Wood and Chonko, 1989). Some studies

showed a positive relationship between the congruence of corporate and employee value

and organizational commitment (Posner et al., 1985; Balazas, 1990; O’Reilly et al.,

1991), and an inverse relationship between such congruence and employee turnover

(O’Reilly et al., 1991). However, Posner (1993) found that clear personal values were

more important in relation to attitudes about work and ethical practices than clarity about

organizational values.

In the electronics industry, the corporate commitment extends their dedication

thru corporate social responsibility. In fact in the study conducted by (Castillo, 2007)

100% of the respondents strongly believe that corporate culture will improve the

Philippine society and economy. In fact they are accounts to more than 100,000 jobs

yearly. Some of the biggest and largest multinational companies in this industry is a

member of different social organization/foundations.

Industry Corporate Culture Once the corporate commitment is identified and recognized the whole

industry can be viewed into one. That corresponds to the commitment they have as

observed by the employees, top management, customer and the world. It is very

important to have an industry corporate culture because underlines the totality of the

whole industry. The Philippine electronics industry can be viewed as a promising

industry in the export industry. In fact, in a news clip” When China entered to the

World Trade Organization in 2001, many economic analysts predicted that the

Philippine electronics industry's days were numbered. But now surprisingly Philippine

electronics still competing in the Global stage.” From nicher to leader the success story of

electronics industry serve as a historical lesson to any industry in the world as they climb the

leverage of success. “As quote and explain in a news item years back.

In order to prepare the Industry Corporate Culture, a road map of issues that

confronts the industry as well as activities, time table must be established in order to

attain the global corporate culture.

Table no. 1: Road Map of Corporate Culture of Electronics Industry

Issues General Activities Specific Activities Priority

Level/Time Table

1. Accelerate

Value:

Theory to Practice

1. Introduce the

concept /model

1. To encourage

open

communication and

suggestion.

High

On Going

(2007-2012)

2. Adding Value:

Local to Global

1. Promote quality

assurance and

improvement.

1. Encourage

employees to

undergone

schooling, attend

trainings and

Medium

On Going

(2007-2012)

seminars.

3. Assessing Value:

Employee to

Consumer

1. Promote

corporate

citizenship and

social

responsibility.

1. Participate in the

CSR expo, promote

social change and

sustainable

development.

High

On going

(2007-2012)

4. Change Value:

Corporate settings

to national

development

1. Partnership with

educational

institution and

NGOs.

1. Adopt a college/

community that will

link industry and

academe.

Medium

On going

(2007-2012)

Accelerate Value: Theory to Practice

It is strongly suggest that management theory will be practice in the corporate

level. It is the benchmark for their growth and success in the future. Open

communication between the top management and employee plays a vital role for its

effect. Idea generation in this stage is very important before conclusion will takes

place. Brainstorming in each department/unit is highly suggested before

recommendation to the management will takes place.

In this portion the role of HR and quality managers will be test as to their

ability on how to convince their subordinates. By providing committees that will take

charge of each activities is strongly advocates. This will put the electronics industry

in a good human resource and quality management practice that will benefit the whole

industry in the 5 years span. The HR and Quality managers must disseminate the

information within the organization and to their affiliations relative to the industry.

Adding Value: Local to Global

Since this industry work in a globalized perspective, it advocates to tap and

use of domestic sources. We have many SMEs who are among the best in the region

but lack exposure in the international market. I strongly suggest to the MNCs to

please provide assistance and support. The shift from local to global can be viewed in

a higher perspective as they assist them in building their own quality products and

services. Considering that they also have the necessary quality output.

Manpower resources also plays important role in this category as they

introduce new methodologist and management style. It also underline the value of

continuous R& D including training, seminars and schooling as well. I foresee also

that we might need many scientist and engineers that will soon lead the culture of

electronics industry. In shaping the culture it’s the technology who dictates on what

we should do in order to be identify. The corporate culture of electronics industry is

highly competitive in any perspective. It is important that we must protect the current

position we have in the world. That culture it possess will make it be on top in the

near future once the activities perform with precision.

Assessing Value: Employee to Consumer

Since Philippine manufacturing captures to more than 60% of the manpower

resources, it is significantly suggest that each corporation to be keen in dealing with

their employees. As we all know that labor is an asset to any organization. It is

sometimes called the success and failure of any organization or entity lies in the

employees hands. Management should take in consideration that human dimension of

quality as they are the one who works hard for the company. They are consider to be

internal customers hence, the management must value and treat them just like

customer of their products and services. This will lead to global corporate culture as

the full grown topics of loyalty and drive mechanisms of the corporate culture.

It also undertakes it responsibility in the society in general as they are

involved in the activities related to social change. As a practice they established some

foundations and adopt a community service. Thru their helping hand in promoting

employment and sustainable development, this will definitely encourage many related

industry to follow their foot prints.

Change Value: Corporate settings to national development

For the Betterment of All" is the common values and goals that surround the

electronics industry. To realize it in the community, in-house community service

committee/ teams carry out professional community share-care programs, while

employees volunteer at various social services and activities but not limited to the

following:

• social sponsorship

• educational/scholarship grants

• charitable/orphanage

• rescue and volunteerism

• trainings/seminars local/abroad

Based on a commitment to the community which establish the highest

standard the same values and ethical mindset are their contribution in the society and

economy as well. They contributes to the well being of society by helping them to

improve the quality of people’s lives and serving cross border community services

both local and worldwide.

Charter for social contribution and nation building This will be the role of electronics industry in the society and economy as a

whole.

• To take part in the well-being of society with all activities based on humanity,

social responsibility and social ethics.

• To improve the quality of people’s lives and to usher more affluence and

happiness in our society.

• To facilitate and activate cross-cultural exchanges with global communities

and preserve global ecology to make the world a more pleasant and healthy

place to live.

• To devote ourselves to volunteering in social welfare services and share our

benefits with society.

Building the right Global Corporate Culture

Building the right global corporate culture is a very long process in terms of its

success and application. It requires support, sacrifice, dedication and most important

contribution of each firms in the industry for their future success and operations. Its

very difficult to create a culture that is dominated by a foreign firms, however the

operation is conducted locally then there is a big chance that the local and foreign

culture can be restructured in the local set up. Just like in the case of Japanese

management style, when they introduce Just in Time as the philosophy of JIT is

simple - inventory is defined to be waste. JIT inventory systems expose the hidden

causes of inventory keeping and are therefore not a simple solution a company can

adopt; there is a whole new way of working the company must follow in order to

manage its consequences. The ideas in this way of working come from many different

disciplines including statistics, industrial engineering, production management and

behavioral science. In the JIT inventory philosophy there are views with respect to

how inventory is looked upon, what it says about the management within the

company, and the main principle behind JIT.7

This Japanese management style is also being done across the world as its

superb application of quality management. In the Philippine managements style we

have the so called “JIC” or Just in Case. This Filipino philosophy in the work place

remind us to be ready in things that might be needed instantly and quickly. This style

also reflects the philosophy of alertness and keen to details of Filipino in the work

place.

Steps to build a Global Corporate Culture

First and foremost step in building the global corporate culture is to begin the

purpose and aims of each firms in the industry on ”How they can be united as one?”

this question is a challenge for them in order to understand that “collaboration is

better than competition”.

Building a global corporate culture is a complex and an on going task.

Collaboration and unification of the existing associations is very important in laying

the strategies that will benefit the whole industry.

● A globally inspiring vision and aspiring mission

● Global information and access

● Facilities and resources

● Networking and integration mechanism

● Global Industry Council

7 http://en.wikipedia.org/wiki/Just_In_Time_(business)

Let’s examine each.

A Globally inspiring vision and aspiring mission

It is very difficult to construct a unified vision and mission of an industry.

Because different corporation have their own diverse culture and reputation to protect

with. In order to prevent disagreement and differences among industry firms, they

must established a guidelines as well as rules and regulations in order to prevent such

scenario in the future.

The bottom line for this is that they must establish a common criteria that will

align the industries vision and mission that is applicable to the changing world.

Global Information and Access

We live in a cyber world and all information is just a click away. Electronic

firms are doing their trade business in the web. For most, all the information that you

need about the companies background, products and services are all in their websites.

In this industry the use of electronic transaction is not unusual in fact majority of their

supplier, buyers, producers prefer the transaction to be in this medium. It is suggested

to have a global information and access to the whole electronics industry. They have

the capability in doing and engaging into this activity.

Facilities and resources

As part of the investment capability of multinational corporations engaged in a

business of holding a parent company and regional branches, facilities and resources

is one of the most important aspect to be consider. This multinational corporations

will not established their business in a country that they can’t benefit from it

strategically and financially.

In the case of electronics industry, they already established an association that

can ask the help of this multinational corporations to please extend their help in

providing the necessary assistance for the whole industry. This is possible because

this multinational corporations are using and maximizing our resources. Its about time

that we ask them to please contribute for the betterment of the industry. In the long

run they will benefit from this as partners in trade and nation building.

Networking and Integration Mechanism

In a globalized economy, industry must be flexible in terms of their network.

They must have the capability to shift from local to global. Each firms in the same

industry have their own established networks and contacts. If you notice the suppliers

and buyers of this firms have almost the same materials, supplies and the like.

Because of that identical and similarity those networks are only revolving around this

industry, its more easier to integrate a common mechanism.

We understand that each firms have their requirements and specification needs

however, they are just in the same industry and same line. It is more difficult to

integrate a network who has a lot of sub groups. In the case of electronics industry

they already identified such sub groups as part of the industry.

Competitive Benefits of a Global Corporate Cultured Industry

● Global flexibility and mobility

● Global Management

● Knowledge-based industry

● Industry Identification

Global flexibility and mobility

Given the complexities in the global aspect. The tendency to shift from local

to global is very significant in their operation. In terms of materials, products and

services and even to technical support, its more easier for them to move. As

multinational corporations engaged in a global mechanism of trade, the flow of

technology transfer and movement of goods benefits the local industry(electronics)

because they are the recipient of this breakthrough. Also in the aspect of global

management, multinational corporations are establishing multiple headquarters(HQ)

positions on the regional aspect where they can maximize their trade business.

For the industry, it will benefit them thru employment and knowledge

management. Since the establishment is in the local set up, the industry is the direct

recipient of the information that later on can be converted into R&D including new

products and local demands.

Global Management

It provides new management style and modern approaches in dealing with the

global leadership in the industry. It manages the gap between local and international

sensitivity. By providing changing responsibilities, modifying relationships, diverse

viewpoints as combined with a structure that simplified the complexity of

management cross-country aspect. Thru this the local industry management

practitioner will be able to learned the multiple perspective, global mindset and lastly

how global managers think the global way.

Knowledge-based Industry

Knowledge management is now a worldwide development elsewhere. As the

newest and highly advanced products from highly advanced technology are develop,

any industry will prosper and perish if they can’t adjust to this modern economic

process.

In order to convert the advantages into output, it is suggested to identify what

industry and or sub-industry has the possibility of its success locally and

internationally. In dealing with the modern competition in a global complexities, it is

suggested to study the life cycle of the industry including its worldwide perspective.

Knowledge-based industry working in a global perspective encourage to conduct a

series of checks and balances internationally. It will provide the industry the

reputation as the knowledge based-industry in a global view as a an application of

modern business strategy.

Industry identification

In a globalized corporate culture, it is suggested to have an industry

identification. The global corporate culture it has is something to be distinguish from

other industry both local and international. Having a distinct and unique industry

identification, it will highlight the countries reputation in the global aspect where the

investors and other financers will be investing more in this sector of industry. As

global competition is going to more competitive elsewhere the industry identification

will capture and break the avenue of competition as it facilitates longer industry

outlook and enhance global competitiveness.