CROSS CULTURAL MANAGEMENT.pdf

FACULTY OF EDUCATION AND LANGUAGE

SEMESTER MAY 2011

BBSB4103

CROSS-CULTURAL MANAGEMENT

BBSB4103 CROSS-CULTURAL MANAGEMENT

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TABLE OF CONTENTS

Table of Contents 1

THE REVIEW OF LITERATURE

1.0 Introduction .……..…………………………,…………………………… 2

2.0 Definition of culture …...………………………………………...…....…. 2

3.0 Overview of selected organization ...…………………………………….. 5

4.0 Corporate culture questionnaire .…………………….…………………... 8

5.0 Deep Dive on each question’s response ……...…………………..……... 9

6.0 Overall evaluation of the result………………………….……….……..…14

7.0 Conclusion ………………………………………………………..….……16

REFERENCES

8.0 References…...………………………………………….………...............18

APPENDICES

9.0 Appendix I : Questionnaire by Nicole C. Moss……………………………… 20


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THE REVIEW OF LITERATURE

This paper evaluates the corporate culture of a selected global organization by reviewing

the result of a survey. The survey is based on the questionnaire posted by Nicole C. Moss

on ―Quiz: What is your corporate culture?‖. Further evaluation of the questionnaire

results was discussed including advantages and disadvantages of the culture.

1.0 Introduction

Culture matters. It matters because decisions made without awareness of the operative

cultural forces may have unanticipated and undesirable consequences. Corporate culture

is believed to influence key aspects of business performance, such as innovation,

customer focus, adaptability to change, and organizational learning. Some experts say it

is also the defining factor in the areas of employee engagement, loyalty, and retention

(Towers Perrin, 2007). When companies ―get the culture right,‖ success often seems to

naturally flow (Saltzman, 2007). But when they get it wrong, failure often seems

inevitable (Neuman, 2007; Probst & Raisch, 2005).

A landmark 1992 study by J. Kotter and James Hesket concluded that, over a 10-year

period, ―companies that intentionally managed their culture effectively outperformed

similar companies that did not. Their findings included revenue growth of 682% versus

166%, stock price increases of 901% versus 74%, net income growth of 756% versus 1%,

and job growth of 282% versus 36%‖ (Warshawsky et al., 2006).

Companies that manage culture well can also benefit in specific performance areas.

Organizations with innovation-friendly cultures, for example, tend to be more profitable,

enjoy faster growth, create more jobs, and have a more productive workforce than their

non-innovative competitors, even in mature industries (Franko, 1989; Capon et al., 1992;

Baldwin & DaPont, 1993). A recent American Management Association (AMA) study,

The Quest for Innovation (2006), discusses at length the importance of an innovative

culture. In such cultures, customers were found to be the number one driver of


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innovation, and the ability to focus on customers was viewed as the top-ranked factor for

developing an innovative culture.

Intel, the organization surveyed, has a long and strong 40years culture since the

establishment. Paul Otellini, the CEO of Intel, when interviewed by Forbes, cited the

success of were due to its culture and belief in egalitarian, merit-based reward, data

driven decision, discipline are the main recipe for the company success. In order to

explore the understanding, an interview was arranged with an Intel manager in Penang,

Malaysia.

2.0 Definition of culture

Before we dwell further on the culture, let’s review its definition. The concept of culture

has been the subject of considerable academic debate in the last five years, and there are

various approaches to defining and studying culture (for example, Barley, Meyer, and

Gash, 1988; Martin, 1991; Ott, 1989; Smircich and Calas, 1987).

Commonly used words relating to culture emphasize one of its critical aspects—the idea

that certain things in groups are shared or held in common. The major categories of such

overt phenomena that are associated with culture in this sense are the following:

1. Observed behavioral regularities when people interact: the language they use, the

customs and traditions that evolve, and the rituals they employ in a wide variety

of situations (for example, Goffman, 1959, 1967; Jones, Moore, and Snyder,

1988; Trice and Beyer, 1984, 1985; Van Maanen, 1979b).

2. Group norms: the implicit standards and values that evolve in working groups,

such as the particular norm of "a fair day's work for a fair day's pay" that evolved

among workers in the Bank Wiring Room in the Hawthorne studies (for example,

Homans, 1950; Kilmann and Saxton, 1983).


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3. Espoused values: the articulated, publicly announced principles and values that

the group claims to be trying to achieve, such as "product quality" or "price

leadership" (for example, Deal and Kennedy, 1982).

4. Formal philosophy: the broad policies and ideological principles that guide a

group's actions toward stockholders, employees, customers, and other

stakeholders, such as the highly publicized "HP Way" of Hewlett-Packard (for

example, Ouchi, 1981; Pascale and Athos, 1981).

5. Rules of the game: the implicit rules for getting along in the organization, "the

ropes" that a newcomer must learn to become an accepted member, "the way we

do things around here" (for example, Schein, 1968, 1978; Van Maanen, 1976,

1979b; Ritti and Funkhouser, 1982).

6. Climate: the feeling that is conveyed in a group by the physical layout and the

way in which members of the organization interact with each other, with

customers, or with other outsiders (for example, Schneider, 1990; Tagiuri and

Litwin, 1968).

7. Embedded skills: the special competencies group members display in

accomplishing certain tasks, the ability to make certain things that gets passed on

from generation to generation without necessarily being articulated in writing (for

example, Argyris and Schön, 1978; Cook and Yanow, 1990; Henderson and

Clark, 1990; Peters and Waterman, 1982).

8. Habits of thinking, mental models, and/or linguistic paradigms: the shared

cognitive frames that guide the perceptions, thought, and language used by the

members of a group and are taught to new members in the early socialization

process (for example, Douglas, 1986; Hofstede, 1980; Van Maanen, 1979b).

9. Shared meanings: the emergent understandings that are created by group members

as they interact with each other (for example, Geertz, 1973; Smircich, 1983; Van

Maanen and Barley, 1984).

10. "Root metaphors" or integrating symbols: the ideas, feelings, and images groups

develop to characterize themselves, that may or may not be appreciated

consciously but that become embodied in buildings, office layout, and other

material artifacts of the group. This level of the culture reflects group members'


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emotional and aesthetic responses as contrasted with their cognitive or evaluative

response (for example, Gagliardi, 1990; Hatch, 1991; Pondy, Frost, Morgan, and

Dandridge, 1983; Schultz, 1991).

In summary, the culture of a group or an organization can be defined as

―A pattern of shared basic assumptions that the group learned as it solved its problems of

external adaptation and internal integration, that has worked well enough to be

considered valid and, therefore, to be taught to new members as the correct way to

perceive, think, and feel in relation to those problems.‖

3.0 Overview of selected organization

The manager interviewed was from Intel, the largest semiconductor company in the

world which has its presence in Malaysia for more than 35years. Mr. Danny Lim who

suggested his name not to be disclosed is the operations manager from an organization

called Embedded and Communications Group.

According to Danny, Intel was established back in 1968 with the headquarter operated

out from Santa Clara, California, United States of America. It has more than 80,000

employees worldwide with approximate 10% of its workforce operated out from

Malaysia. Intel is ranked number one in the semiconductor industry with it revenue of

USD43.6 billion in 2010. It has a very high gross margin ~66%. Its market capitalization

of ~USD120.8 billion provides the scale to lead in semiconductor businesses.

Intel Corporation is the inventor of the x86 series of microprocessors, the processors

found in most personal computers. Intel also makes motherboard chipsets, network


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interface controllers and integrated circuits, flash memory, graphic chips, embedded

processors and other devices related to communications and computing. Founded by

semiconductor pioneers Robert Noyce and Gordon Moore and widely associated with the

executive leadership and vision of Andrew Grove, Intel combines advanced chip design

capability with a leading-edge manufacturing capability.

According to Intel website, Intel’s mission is ―This decade we will create and extend

computing technology to connect and enrich the lives of every person on earth.‖

There are altogether 6 values that are guiding the way how Intel operates. They are :

Customer orientation

Results orientation

Risk taking

Great place to work

Quality

Discipline

Intel’s objectives are:

Grow PC and Datacenter business with new users and uses

Extend Intel Solutions to win in adjacent market segments

Create a continuum of secure, personal computing experiences

Care for our people, the planet, and inspire the next generation

Speaking about Intel Malaysia, over the past 30 years it has grown into the largest, most

mature manufacturing facility outside of the United States. Intel Malaysia now comprises

two big campuses and employs more than 8,500 people. Intel Penang houses assembly

and test and chip design activities while Intel Kulim has its assembly and test operations

for majority of the Intel components as well as board design operations.


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Known for its world-class safety standards in the global semiconductor industry, Intel

Malaysia is also a two-time winner of the Prime Minister's Quality Award, a symbol of

excellence honored to public and private organizations that implement outstanding total-

quality management programs and contribute significantly to the country's economy and

community.

For Embedded and Communication Groups in Intel Malaysia, it was established back in

1992 initially was to transfer the embedded microcontroller business back to Malaysia.

Since then, it has grown from a member of 12 to a much sizable organization of ~300

people. It has multiple capabilities from chip design, validations, software development,

platform design as well as marketing functions. The workforce mainly resides in Penang

operations supporting the customers in Asia Pacific as well as designing embedded

processors to serve Embedded and Communication Groups customer worldwide.


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4.0 Corporate Culture Questionnaires

According to Nicole C. Moss survey, there are altogether 15 questions that could help

one to identify the type of culture for that organization. These are list of questions which

are intended to explore different aspects of corporate practices and attributions in order

for the categorization of the organizational cultures.

In this survey, there are 3 types of cultures being called out by categorizing the questions

into three main sections, question 1-5, 6-10, 11-15. If the person answering the

questionnaire responded the most ―True‖ answers in any of the section, then the

organization will most likely fall into that type of culture. If the same number of most

―True‖ questions in more than one section, then the culture believed to be the

combination of both. Further evaluation by matching to the research news and data will

be correlated.

The three sections of the culture called out are Deliberative/ Traditional culture,

Established/ Stable Culture and Urgent/Seat of the Pants culture.

Below is the set of the questionnaires. If the respondent agrees to the statement, then a

―True‖ statement will be noted and counted. In the end, number of ―True‖ statement will

be calculated and the section which has the most ―True‖ responses will be used as the

result of the categorization for the type of culture that the respondent’s organization falls

into. Each question, with selected answer will be supplied with additional explanation on

rationale.

Deliberative /

Traditional Culture

1. I know how my projects contribute to the success or failure of

our organization.

2. Management here makes lots of announcements to employees.

3. I have colleagues from a wide variety of professional and

personal backgrounds.

4. In this organization, people who are not ready to be promoted

after a certain length of time at their level are generally


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encouraged to leave.

5. Departments or teams compete with each other for our

organization's resources.

Established/ Stable

Culture

6. When people are not getting along here, it's a long time before

we directly address the issue.

7. When it's time for me to learn a new skill, training is readily

available at no cost to me.

8. When the boss tells us to "jump!" we ask "how high?"

9. It takes a long time for this organization to address customer

concerns.

10. Many employees expect to work at this organization for their

whole careers.

Urgent/ Seat of the

Pants culture

11. Senior management says the door is always open -- and they

mean it.

12. It is fun to work here.

13. We have three or fewer layers of management.

14. We have performance reviews less than once a year.

15. 15. Compensation and benefits are relatively low here.

Table 1.0 Cultural questions by Nicole C. Moss.

5.0 Deep Dive on each question’s response

1. I know how my projects contribute to the success or failure of our

organization.

Response: True

Discussion: Each employee of the organization is given a defined roles and

responsibility. The deliverables are tied to a higher goal of the organization

and eventually will be linked and supporting to the overall corporate goal. The


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document used to link to the organizational goal is called IMBO (Intel

Management By Objective).

2. Management here makes lots of announcements to employees

Response: True

Discussion: As a technology leader, Intel has deployed lots of electronic

communication tool to stay in contact with employees worldwide. Tools like

webcast, audiocast that can link the corporate leader to global employees

allow the information to be shared on a real time manner. (Karlgaard, 2011),

Every quarter, there will be BUM (Business Update Meeting) made available

for employees to learn and understand the company business, business

strategies and corporate focus areas. That would allow the employee to

understand and have a clear understanding of how they can contribute to the

overall company direction. Email, web portal, teleconference, Telepresence ®,

phone allows employee to stay in contact with corporate for seamless

information sharing and transfer.

3. I have colleagues from a wide variety of professional and personal

backgrounds.

Response: True

Discussion: Intel observes diversity as the source of innovation and equality in

employment (Karlgaard, 2011). In its diversity policy, the company respects,

values, and welcomes diversity in its workforce, as well as in its customers, its

suppliers, and the global marketplace. Intel policy is to provide equal

employment opportunities for all employees.

Intel does not discriminate on the basis of race, color, religion, sex, national

origin, ancestry, age, disability, veteran status, marital status, gender identity

or sexual orientation. Its policy applies to all aspects and stages of

employment from recruitment through retirement. It also prohibits harassment

of any individual or group.


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4. In this organization, people who are not ready to be promoted after a certain

length of time at their level are generally encouraged to leave.

Response: False

Discussion: In Intel, employee’s performance is based on meritocracy. Merit

is based on performance and not by seniority. For poor performance

employee, Intel has its performance management policy to improve their

performance but not to terminate them without given sufficient opportunity

for improvement.

5. Departments or teams compete with each other for our organization’s

resources.

Response: True

Discussion: Similar to any other companies, budget and resources are always

constraint. Therefore, each organization will compete for resources,

depending on the importance and priority of the projects or deliverables to

corporate.

6. When people are not getting along here, it's a long time before we directly

address the issue.

Response: False

Discussion: Intel practices constructive confrontation in which culture created

by the former CEO, Andy Grove. If there is any people issue, Intel has

process to handle the issue timely and professionally. Even though Intel

operates in Asian countries, all employees have guidelines to adopt the

corporate culture to confront any issues constructively instead of avoiding it.

7. When it's time for me to learn a new skill, training is readily available at no

cost to me.

Response: True


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Discussion: Training and people development is very important to Intel. All

new employees will be given orientation and on the job training. In fact, lots

of money is allocated aside for employee’s training internally and externally.

Intel managers are also required to conduct training and sharing with junior

employees to impart learning and experience.


Response: True

Discussion: This is an interesting statement. According to Danny, this is a

typical behavior from the employee to ask for an accurate description of

deliverables. Each employee has his deliverables / goals to achieve using the

SMART (Specific, Measureable, Achievable, Realistic, Time-bound) criteria.

In this context, the goal has to be specific and measurable.

9. It takes a long time for this organization to address customer concerns.

Response: True

Discussion: This is partly true due to the structure of how the company

operates. There are many organizations which will handle with customer

concerns and the responsiveness is sometimes delayed. However, Paul

Otellini, Intel CEO, launched a shift in customer focus program (Business

Week, 2006). Through out several years’ effort, Intel has won Apple and Sun

which were once had never used Intel chips before.

10. Many employees expect to work at this organization for their whole careers.

Response: False

Discussion: Though Intel wishes to keep their employees, however, the truth

is that employees move from one organization to another. Internally Intel

allows job rotation and job realignment which allow to a larger extent job

enrichment that would enhance job satisfaction as well as employee retention.


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11. Senior management says the door is always open -- and they mean it.

Response: True

Discussion: Intel has policy called ―Open Door Policy‖ which allows the

employee to escalate any issue to senior management or Human Resources

without any fear. In fact, all open door cases are handled confidentially to

respect the employee who raised the issue. Issues can be personal, harassment,

code of conduct, unfair treatment etcetera.


Response: True

Discussion: Intel allocated a certain budget to make the work place a ―work

place of choice‖. Events like festive celebrations, durian party, sports

competition, annual function etcetera are commonly held in addition to the

conducive workplace. Relax room, gym, free soft drinks and fruits are among

the perks given to improve the overall work place on top of the flexible

working hour, telecommute etcetera.


Response: False

Discussion: Intel has >80,000 employees worldwide and therefore it has more

than 5 layers of management right from the top. Even though a flatter

organization is desired but it is still a challenge to have less layers given the

size of the organization.


Response: True

Discussion: Intel practices year round performance though the formal review

will be done twice a year.

15. Compensation and benefits are relatively low here.

Response: False


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Discussion: Intel’s compensation is competitive to the market with the similar

industry. This is to ensure attractiveness to attract talents into the organization.

6.0 Overall evaluation of the result

Based on the survey, there are many ―True‖ answers in the 15 questions. Among them,

section for questions 1-5 have 4 ―True‖s whereby there are 3 ―True‖s for both questions

6-10 and questions 11-15. Therefore, per the guidelines from the survey, the organization

surveyed falls into the type of Deliberative/ Traditional culture. The other two types are

close and it may have some elements from the other two types of culture.

Firstly, let’s discuss the advantages and pitfalls from this type of culture.

6.1 Advantages

The surveyed organization’s culture tends to be traditional type where there are lots

of intellect and thoughtfulness in managing this type of organization. In Intel,

through the 43 years of presence, it bounds to have lots of wisdom in the way how

this organization being managed. From the book of ―Good to Great‖ by Jim

Collins, there are not many companies that can survive through the business

challenges especially in technology based industry. There has to be lots of ―right

people on the bus‖ which will set up good processes to navigate through the

turbulence of business. Intel’s philosophy is to attract talents. Through the diversed

hiring policy, many talents are attracted to join the organization. There are also lots

of structures in place in order to manage the global workforce effectively. Intel’s

former CEO, Andy Grove who was widely recognized by the industry as a

thoughtful leader has set the company ahead of competition using the company

asset which is mainly the people to innovate and deliver one after another, great

products that can excite the personal computer industry. Without which the people,


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there will not be the technology such as processor, wireless connection, WiMAX,

USB etcetera that will become a ―not to be missed‖ technology in today’s life.

In Intel, communication is crucial to the company. Senior management constantly

communicates the company direction, business strategies from time to time via the

BUM (Business Update Meeting), open forum, Meet – the – people session, online

chat, teleconference, intranet, videos, web portal, Internal ―Facebook‖-like network

and many more. It allows the employees to stay connected with the senior

management at the top.

6.2 Pitfalls

One of the recognize pitfalls for the organization is its size which is a challenge for

the company to stay nimble and agile in responding to the ever changing business

environment.

Due to many layers of management, it is also possible that sometimes certain

information is not able to reach to the grass root of the organization. There are also

many stakeholders to be managed in order to reach consensus and agreement on

certain strategies.

Innovation, an element that is vital to a company which relies on technology will

become a challenge if there are many bureaucracy and red-tapes in the

organization. Great ideas may not be able to bubble up to the top and it may be

dead in the middle of the incubation. Therefore, the organization has acknowledged

the barrier and challenge and has put forth processes to incubate and breed new

ideas. New Business Initiative (NBI) is one of the initiatives to invest in new

technologies and breakthrough so as the innovation will continue and flourish

within the organization.

In order to respond to change, the organization will need to stay agile in its decision

making process. There are many tools were deployed in order to facilitate and

expedite decision making process such as product funding, termination, new


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product development etcetera. It is crucial as the more stakeholders are in the

decision making process, the clearer roles are required to avoid any delay in the

decision.

7.0 Conclusion

Though the survey called out the organization as a ―Deliberative/ Traditional‖ type, it

does exhibit attributes from the stable and urgent type of organization. For example, Intel

has been in the industry for more than 40years and its business has been focused on

computing industry all this while is in fact an evidence of a stable company. It has many

processes in place and has emphasized on the importance of people development and

training opportunities. The compensation for the employees is equally good and

competitive. On the other hand, Intel is also a People Orientation company. GPTW

(Great Place To Work) and ―win and have fun‖ is one of the company’s six values. It can

rally the whole organization in addressing the threat and able to navigate through the

challenges such as memory to processor business direction change, rise of mobility,

internet boom challenges, interoperability of different devices and so forth.

As a summary, it is important for a global company like Intel to have a process and

structure in place in order for the people to work with each other and rally the

organization to achieve its goal. However, due to its size and scale, it is also important for

the organization to stay nimble to face the fierce competition in the industry. It has to

strike between the two in managing the size as well as operating like a small company. In

addition, the asset for this company is actually new technology which is invented by the

people should be valued and appreciated. Therefore, the recognition and reward system is


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important to retain the talent. Change management is vital to a technology company in

which the communication is critical for successful transition and also change in the

corporate decision and strategies. Intel has good track record and has proven to the

industry that a global and stable company can still excel and successful using technology

and also the intellects of the organization.

[Total word count: 3950]


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8.0 REFERENCES

American Management Association/Human Resources Institute (2008). Cultivating

Effective Corporate Cultures: A Global Study of Challenges and Strategies: Current

Trends and Future Possibilities 2008-2018, American Management Association

Andrew S. Grove (1995). High Output Management, Vintage Books

Edgar H. Schein (1999). The Corporate Culture Survival Guide, Jossey-Bass

Edgar H. Schein (1999). Organizational Culture and Leadership, Second Edition,

Jossey-Bass

Edwards, Cliff (2006). Inside Intel: Paul Otellini's plan will send the chipmaker into

uncharted territory. And founder Andy Grove applauds the shift, Business Week

Karlgaard, Rich (2011). Intel CEO Otellini on Successful Company Culture, Forbes

[Online] Available: http://blogs.forbes.com/richkarlgaard/2011/02/16/intel-ceo-otellini-

on-successful-company-culture/

Lövey Imre, Manohar S. Nadkarni Manohar, and Eszter Erdélyi Eszter (2007).

How Healthy is Your Organization?: The Leader’s Guide to Curing Corporate Diseases

and Promoting Joyful Cultures, Greenwood Press

Neuman, J. H. (n.d.). Measuring the costs associated with stress, injustice and bullying.

Workplace Bullying Institute. Retrieved on September 2, 2007, from

www.bullyinginstitute.org

Nicole C. Moss (2006). Quiz: What is your corporate culture? [Online] Available:

http://www.inc.com/articles/2001/08/23312.html

Towers, Perrin (2007). Global Workforce Study. [Online] Available:

http://www.towersperrin.com/tp/getwebcachedoc?webc=HRS/NLD/2007/200710/GWS_c

orereport_NL.pdf

http://blogs.forbes.com/richkarlgaard/2011/02/16/intel-ceo-otellini-on-successful-company-culture/

http://blogs.forbes.com/richkarlgaard/2011/02/16/intel-ceo-otellini-on-successful-company-culture/

http://www.bullyinginstitute.org/

http://www.inc.com/articles/2001/08/23312.html

http://www.towersperrin.com/tp/getwebcachedoc?webc=HRS/NLD/2007/200710/GWS_corereport_NL.pdf

http://www.towersperrin.com/tp/getwebcachedoc?webc=HRS/NLD/2007/200710/GWS_corereport_NL.pdf


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Solomon, M Charlene and Schell, S. Michael (2009). Managing Across Cultures: The

Seven Keys to Doing Business with a Global Mindset , McGraw-Hill

Probst, Gilbert and Raisch, Sebastian (2005). Organizational crisis: The logic of failure,

Academy of Management Executive

Saltzman, J. M. (2007). Corporate culture: The ultimate competitive advantage. Talent

Management Magazine, 18-21.

Woppman, Glenn (2010) Manager Forum: Nurturing Your Culture Goes to the Bottom

Line, ASSET InterTech


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Appendix I

Questionnaire by Nicole C. Moss

Respondent: Danny Lim

Cultural Type Question Response

Deliberative /

Traditional

Culture

1. I know how my projects contribute to the success or failure

of our organization.

2. Management here makes lots of announcements to

employees.

3. I have colleagues from a wide variety of professional and

personal backgrounds.

4. In this organization, people who are not ready to be

promoted after a certain length of time at their level are

generally encouraged to leave.

5. Departments or teams compete with each other for our

organization's resources.

1. True

2. True

3. True

4. False

5. True

Established/

Stable Culture

6. When people are not getting along here, it's a long time

before we directly address the issue.

7. When it's time for me to learn a new skill, training is readily

available at no cost to me.


9. It takes a long time for this organization to address

customer concerns.

10. Many employees expect to work at this organization for

their whole careers.

6. False

7. True

8. True

9. True

10. False

Urgent/ Seat of

the Pants

culture

11. Senior management says the door is always open -- and

they mean it.




15. Compensation and benefits are relatively low here.

11. True

12. True

13. False

14. True

15. False

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CROSS CULTURAL MANAGEMENT.pdf