Chapter 9: Corporate Culture and ValuesJoe Pan Sue ChiuSamy LeeShihchin Yen

What is Culture?

Culture = the set of values, norms, guiding beliefs, and understandings that is shared by members of an

organization and taught to new members.

Levels of Corporate Culture

Internal Integration

External Adaption

Emergence and Purpose of Culture

Two critical functions in organizations:

Interpreting Culture

Interpreting Culture

• Rite of PassageRite of Ceremonies

Everybody’s first day on the job at an architecture firm is spent making prints.

Interpreting Culture

• Rite of Integration

Rite of Ceremonies

Interpreting Culture

Stories and Myths

FedEx story about the employee who, having misplaced the key to the drop box, uprooted the whole box and brought it to short station.

Interpreting Culture

Symbol

Voice-Data-Telephone Leg Godt

Interpreting Culture• Organizational Chart for

NordstromOrganization

Structures

Interpreting CulturePower

Relationships

A Team-Based, Flat Lattice

Organization

Freedom to encourage, help, and allow other associates to grow in knowledge, skill, and

scope of responsibility

The ability to make one's own commitments and

keep them

Consultation with other associates before undertaking actions that could impact the

reputation of the company

Fairness to each other and everyone with whom we

come in contact

Interpreting CultureControl Systems

No vacation policy (take as much as you want, as long as you're doing a great job and covering your responsibilities).Freedom and responsibility" vs command-and-controlGood managers give their employees the right context in which to make decisions--and then the employees make the decisions.

Organizational Design and Culture

Organizational Design and Culture

Innovation

Creativity

Risk-taking

Adaptability Culture

Organizational Design and Culture

Clear vision of purposes

Achieve them in stable

environment

Mission Culture

Organizational Design and Culture

Clan Culture

The Needs of employee

s as a route to

high performa

nce

Organizational Design and Culture

Bureaucratic Culture

Consistency orientation

Stable environment

Culture Strength and Organizational Subcultures

• Culture strength – refers to the degree of agreement among members of organization about the important of specific values.

• Subcultures- develop to reflect the common problems, goals and experiences of a team or department.

Organizational Culture, Learning, and Performance

• Culture enables learning and innovative response to challenges, threats, or opportunities.

• Strong adaptive cultures often incorporate the following values:• The whole is more important than the parts• Equality and trust are primary values• The culture encourages risk taking, change, and

improvement

Constructive Versus Non-Constructive Cultures

Constructive Culture Non-Constructive Culture

Observable Behaviors

Managers pay close attention to all constituencies and initiate change when needed to serve the broader interests, even when it means taking risks

Managers tend to be somewhat isolated and bureaucratic. They are comfortable with status quo and do not take risks to adjust to or take advantage of shifts in the environment

Underlying Values

Managers care deeply about all stakeholders; strongly value people and processes that create useful change

Managers care mainly about themselves, their immediate work group, or some product associated with that group; value the familiar management process more than change initiatives.

Individual Ethical Principals

• Ethics refer to the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong

• Sources of Individual Ethical Principles and Actions

History Society Local Environment

Individual Ethics and

Actions

Managerial Ethics

• Relationship between the Rule of Law and Ethical Standards

• Managerial ethics are principles that guide the decisions and behaviors of managers

• An ethical dilemma arises in a situation concerning right and wrong in which values are in conflict

Legal Requirem

ents

Ethical Standard

s

Corporate Social Responsibility (CSR)

• An extension of the idea of managerial ethics• Make choices and take actions that contributes to the

welfare and interest of all organizational stakeholders• Shared values• People are paying closer attention to what organizations do• Being a good corporate citizen can enhance their firm’s

reputation and even profitability

How Managers Shape Culture and Ethics

Values-Based Leadership• Interpersonal Behaviors• Fairness with Others• Personal Actions and Expectations• Organizational Leadership

Formal structure and System• Structure• Disclosure Mechanisms• Code of Ethics• Training Programs

Values-Based Leadership

Values-Based Leadership

• A relationship between a leader and followers that is based on shared, strongly internalized values that are advocated and acted upon by the leader.

Values-Based Leadership

Formal Structure and Systems• Ethics Committee• Ethics Department• Ethics Hotlines

Structure

• Whistle Blower• (involves employee disclosure of illegal,

dangerous, or unethical activities)Disclosure Mechanisms

• A formal statement of the company’s values concerning ethics and social responsibility.Code of ethics

• To ensure that ethical issues are considered in daily decision making, many supplement a written code of ethics with employee training programs.

Training Programs

Corporate Culture and Ethics in a Global Environment

• Employees from different countries may have varied attitudes and beliefs.

• Research has indicated that national culture has a greater impact on employees than does corporate culture.

• Geographic Ethics Leads• To make sure the ethics code was written in appropriate

language and addressed to the needs of employees in the different regions

Corporate Culture and Ethics in a Global Environment

• Social Audit• Measures and reports the ethical, social,

and environment impact of a company’s operations

• The Social Accountability 8000 (SA8000)• The only auditable social standard in the

world

Social Accountability 8000： SA 8000

Provided by Social Accountability International (SAI), including below 8 main topics:1. Child Labor2. Forced and Compulsory Labor3. Health and Safety4. Freedom of Association and Right to Collective Bargaining5. Discrimination6. Disciplinary Practices7. Working Hours8. Remuneration - payroll

Case study & lesson learned

International acquisitionof

BenQ-Siemens

BenQ-Siemens Acquisition Background

Started on June 7, 2005: Announcement of BenQ acquisition of Siemens mobile device business What BenQ got from the acquisition?1. 250 million euros in (cash + service)2. 50 million bought in BenQ stock by Siemens.3. Zero-debt Siemens mobile device business4. 6,000 Siemens staff (including 1,600 R&D and 600 patents)

End on September 28, 2006: terminated with loss in 35 billion NTD.

A dream in becoming global brand

Ideally, BenQ looked for becoming a global brand via this acquisition, the road map for branding was:

BenQ BenQ-Siemens (co-branding) BenQ (bring up other product lines)

BenQ became top 4 in mobile device (Nokia、Motorola、 Samsung、 Siemens)

A difficult task

Integration of different culture:

accuracy vs. innovation stability vs. speedyprocess vs. flexible

mistake avoidance vs. success pursuinglong term vs. short term

different attitudes to the acquisition….

Hofstede's cultural dimensions theory

What else to this trouble?

Sole decision making by management (self-confident) – even already knew the possible huge loss after acquisition & the tough of Germany union.

Lack of financial engineering/due deligence A copier/follower to the Sony-Ericsson co-

branding way (October 27, 2001, 50%/50% JV; February 16, 2012, 100% Sony )

Common certificates for company

ISO 9001 - Quality ISO 14001 - Environment OHSAS 18001-Occupational Health and Safety SA 8000 - Corporate Social Responsibility

UNDER ARMOUR Code of ConductUNDER ARMOUR CODE Values: Child Labor: Forced Labor: Discrimination: Hours of Work: Wages and Benefits: Overtime Compensation: Freedom of Association and Collective Bargaining: Harassment or Abuse: Health and Safety: Environment: Legal and Ethical Business Practices:

Code of Conduct

Code of Conduct (ICoC) & Management System Index Result

 Chapter: Compliance Management System

Total Achievable Score

Achieved Score Current Index %

Previous Index % Total Achievable Score

Achieved Score Current Index %

Previous Index %

1. Legal Requirements 0 0 0 0 0 0 0 0

2. Child Labour & Young Worker 0 0 0 0 0 0 0 0

3. Health & Safety 9 5 56 0 0 0 0 0

4a. Workers Basic Rights 40 30 75 0 0 0 0 0

4b. Workers Rights52 52 100 0 0 0 0 0

5. Housing Condition 4 1 25 0 0 0 0 0

6a. Environment 28 18 64 0 0 0 0 0

6b. Sandblasting & Chemical Treatment 0 0 0 0 0 0 0 0

6c. Metal Plating0 0 0 0 0 0 0 0

Home Workers 0 0 0 0 0 0 0 0

8. Transparency & Monitoring 0 0 0 0 0 0 0 0

Total Score 133 106 80 0 0 0 0 0